The US Justice Department has filed criminal charges against ex-Jefferies & Co. Inc. Director Jesse Litvak, who is accused of defrauding investors in residential mortgage-backed securities. The former senior trader allegedly also defrauded a federal bank bailout program and private and public funds when he falsified sellers’ identities and prices to try to make more money for his employer.
Investigators contend that Litvak was able to generate over $2.7 million from his securities scam. He has pleaded not guilty to 16 criminal charges. The case against him is the first under a law that bans major fraud against the US through TARP (the Troubled Asset Relief Program.)
Meantime, the Securities and Exchange Commission has filed a civil case against Litvak over the same alleged RMBS fraud. The SEC says that the former Jefferies director would lie about the buying price of mortgage-backed securities that he would purchase from one client and sell to another. He is accused of making up a fictional seller to make it seem like he was putting together an RMBS trade between customers when he was actually just selling securities from the inventory of the firm at a high price.
The Commission believes that Litvak’s alleged wrongdoing allowed him to enhance his position at Jefferies where the revenue he brought in impacted his bonuses. The regulator is charging Litvak with violating the federal securities laws’ antifraud provisions.
Our RMBS law firm represents investors that have been defrauded because of misconduct by members of the financial industry. Contact our mortgage-backed securities law firm today.
Charges ex-Jefferies exec with mortgage debt fraud, Chicago Tribune/Reuters, January 28, 2013
Ex-Jefferies Exec Sees Criminal Charges, SEC Lawsuit Over Alleged RMBS Scheme, Bloomberg/BNA, January 30, 2013
Troubled Asset Relief Program
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