Why it matters: A few interesting and diverse securities fraud matters from late 2015—one from the Second Circuit, two from the SEC—caught our eye. Read on for a recap.
Detailed discussion: The last two months of 2015 saw the announcement of three interesting and diverse matters from the world of securities fraud jurisprudence and enforcement that we found worthy of note. We recap them here:
December 8, 2015—The Second Circuit in U.S. v. Litvak reversed the securities fraud conviction of a defendant broker-dealer on evidentiary grounds: Defendant Jesse Litvak (Litvak), a registered broker-dealer with Jeffries & Co. (Jeffries), was indicted in January 2013 for securities fraud and other charges. The indictment alleged that Litvak made fraudulent misrepresentations to "purchasing counterparties" in order to "covertly reap excess profit for Jeffries in the course of transacting residential mortgage-backed securities (RMBS)." These included misrepresentations as to the costs to Jeffries of acquiring the RMBS and the price at which Jeffries had negotiated to resell them. In March 2014, after a 14-day jury trial, Litvak was convicted of securities fraud and sentenced to two years in prison. On appeal to the Second Circuit, the court considered four of Litvak's many challenges to his conviction, but the challenge that proved successful and led the court to vacate the conviction and remand the case for a new trial was evidentiary, having to do with whether the district court erred when it excluded portions of two experts' testimony proffered by Litvak at trial.
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