Home / News / Government / Former Managing Director at Jefferies Charged with Securities Fraud
Print This Post Print This Post

Former Managing Director at Jefferies Charged with Securities Fraud

A former managing director and senior trader at Jefferies & Co. was charged for allegedly defrauding investors when selling residential mortgage-backed securities (RMBS), the ""Securities and Exchange Commission"":http://www.sec.gov (SEC) announced in a release.

[IMAGE] [COLUMN_BREAK]

Jesse Litvak was charged with securities fraud, Troubled Asset Relief Program (TARP) fraud, and making false statements to the federal government, according to a separate announcement from ""Special Inspector General for the Troubled Asset Relief Program"":http://www.sigtarp.gov (SIGTARP) and the ""U.S. Attorney's Office in Connecticut"":http://www.justice.gov/usao/ct/.

The SEC's complaint alleges Litvak, who worked out of the office in Stamford, Connecticut--was not honest with customers about the price at which his firm bought MBS so he could re-sell the MBS at a higher price while making extra money for the firm. Litvak also deceived customers by creating a fake third-party seller and claiming he was arranging a MBS trade between customers when he was actually selling MBS out of his firm's inventory at a higher price. The practices went on from 2009 to 2011, according to the SEC.

""Brokers must always tell their customers the truth, particularly in complex securities transactions in which it is difficult for investors to determine market prices on their own,"" said George Canellos, deputy director of the SEC's Division of Enforcement.

The SEC's complaint, which was filed in federal court in Connecticut, further alleges Litvak generated more than $2.7 million in additional revenue for Jefferies through his practices, which in turn helped him earn bonuses. Litvak also allegedly defrauded funds that received financial support from TARP.

About Author: Esther Cho

x

Check Also

HUD Grants $150M to Tribal Communities for New, Affordable Housing

“Strong investments in Tribal communities help ensure residents can access much-needed safe and affordable housing,” said Secretary Marcia L. Fudge. “The funds HUD is making available will meet the challenges of today and allow Tribal communities to make innovative and vital advancements needed to prepare for the future."