Ex-Jefferies trader gets two years in prison in fraud case

Wed Jul 23, 2014 6:09pm EDT
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By Jonathan Stempel

NEW HAVEN Conn. (Reuters) - A former Jefferies Group Inc managing director convicted of defrauding investors who traded mortgage bonds through a government program established after the 2008 financial crisis was sentenced on Wednesday to two years in prison.

Jesse Litvak, 39, had been convicted on March 7 on all 15 counts, including 10 counts of securities fraud and one count of fraud under the federal bailout known as the Troubled Asset Relief Program (TARP).

Litvak was the first person charged under a 2009 law banning major fraud against the United States through TARP.

He was sentenced by Chief Judge Janet Hall of the U.S. District Court in New Haven, Connecticut, who presided over the jury trial. Hall also fined Litvak $1.75 million.

Defense lawyers had contended that their client, a married father of two, had been unfairly singled out for behavior that was common on Wall Street.

"I do not view you as singled out," the judge told Litvak. "You lied. Maybe that's what people do every day on Wall Street, but that still doesn't make it legal."

The prison term was longer than the maximum 14 months requested by Litvak. It was also shorter than the nine years sought by prosecutors, who also wanted a $5 million fine.

Hall found the government request unduly harsh.   Continued...

Jesse Litvak, a former managing director at Jefferies Group Inc., walks to U.S. District Court in for his hearing New Haven, Connecticut July 23, 2014. REUTERS/Mike Segar