(Adds quotes from judge, details on crime)
By Andy Thibault
NEW HAVEN, Conn., April 26 A federal judge in
Connecticut on Wednesday sentenced a former Jefferies Group bond
trader to serve two years in prison and pay a $2 million fine
after he was found guilty earlier this year of defrauding
customers on bond prices.
A jury in January found Jesse Litvak guilty of one of 10
criminal charges he had faced, a muted victory as prosecutors
try to crack down on nefarious sales practices on Wall Street.
The verdict marked the second time that Litvak was found
guilty of fraud. He was first tried and convicted in 2014 and
sentenced to two years in prison, but that verdict and sentence
were overturned on appeal.
Federal prosecutors had asked Judge Janet Hall to sentence
Litvak to nine to 11 years in prison, while his defense
attorneys had sought eight months of house arrest at his home in
Boca Raton, Florida. Litvak had worked in the Stamford,
Connecticut, office of Jefferies, a unit of Leucadia National
"Your victims were harmed by your lies," Hall told Litvak
before sentencing him. "They would not have paid you what they
paid you if you told the truth."
Litvak was stoic throughout the hearing, which lasted
several hours, and showed no visible emotion when Hall handed
down the sentence, which also called for three years' supervised
release following his prison term. She ordered Litvak to report
to prison by Sept. 22.
Prosecutors argued that a stiff sentence, even tougher than
the one handed down for the previous conviction on all 10
counts, was needed to deter illegal tactics in the financial
Litvak, who had been a managing director at Jefferies, was
accused of generating $2.25 million of illegal profit by
misleading customers including AllianceBernstein and Soros Fund
Management about bond prices from 2009 to 2011.
Prosecutors said Litvak was motivated by greed, and that his
"lies" caused customers to overpay for bonds they bought and
accept lower prices for bonds they sold.
Defense lawyers said, however, Litvak's customers were
sophisticated, with a deep well of talent and resources, and
would be skeptical if prices that Litvak quoted looked wrong.
Litvak was the first of at least eight traders criminally
charged by federal prosecutors in Connecticut in a crackdown on
abuses by bond trading desks. Three agreed to plead guilty,
while three from Nomura Holdings Inc face a trial next
(Writing by Scott Malone; Editing by Bernard Orr and Steve