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Brokers (Allegedly) Found Mysterious Line Between Legal And Illegal Lying, (Allegedly) Crossed It

A bunch of guys at Nomura know what we're talking about.
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Unless and until a federal court says they can’t anymore, federal prosecutors are going to continue to go after brokers who stray from the little white lies brokers are essentially paid to tell to the big, fat, currently felonious whoppers that people like Jesse Litvak tell. Like (allegedly) the former head of mortgage-backed bonds at Nomura and a couple of confederates, who are anxiously awaiting that appeals court decision.

The S.E.C. contends that this happened in deals brokered by the Nomura traders. In one transaction involving Mr. Shapiro, the S.E.C. said, Nomura made misstatements that led a customer to sell bonds for a price below what the buyer ultimately paid. By getting the price down, the S.E.C. said in its complaint, Nomura booked $1.1 million in extra profits for itself when selling the bonds at a higher price to the buyer...In the complaint, the S.E.C. said the traders generated at least $7 million in extra revenue for Nomura. Over nearly four years, the agency said, Mr. Shapiro earned compensation of $13.3 million, while Mr. Gramins made $5.8 million and Mr. Peters earned $2.9 million...The United States Court of Appeals for the Second Circuit is considering whether to overturn the conviction of Jesse C. Litvak, a bond trader who is accused of misdeeds similar to those the Nomura traders are charged with committing. In their appeal, lawyers for Mr. Litvak argued that the Federal District Court that convicted Mr. Litvak did not prove that his misstatements were “material.”

3 Nomura Traders Accused of Deceiving Customers About Mortgage Bond Prices [DealBook]


By Paul Elledge Photography [CC BY-SA 3.0], via Wikimedia Commons

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