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Pietragallo's White Collar Criminal Defense Group

In today's environment, the government has never more aggressively regulated, investigated, pursued and prosecuted white collar crime. If you or your company becomes embroiled in any type of federal or state government investigation, you need experienced trial lawyers who have gone toe-to-toe with prosecutors and government agents.

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    Tuesday
    Jul312018

    No Third Trial for Former Bond Trader Litvak

    What Happened?
    After the U.S. Court of Appeals for the Second Circuit reversed former Jefferies Group bond trader Jesse Litvak’s securities fraud conviction for the second time, the government moved to dismiss the indictment against him, thus ending a five-year criminal case.

    The Rundown
    In 2014, Litvak was convicted in the U.S. District Court for the District of Connecticut on multiple counts of securities fraud and making false statements for defrauded a federal program designed to aid the mortgage-backed securities market after the financial crisis. He was sentenced to twenty-four months’ incarceration and a $1.75 million criminal fine, but the U.S. Court of Appeals for the Second Circuit reversed, holding that the district court had committed reversible error by excluding defense expert testimony.

    The government tried Litvak again, and in 2017, a jury convicted him on one count of securities fraud for lying to a portfolio manager for the price he paid for a mortgage-backed bond. The manager testified that he believed Litvak had been acting as his agent and owed him accurate information about the bond’s price.  He was again sentenced to twenty-four months’ incarceration. In May 2018, the U.S. Court of Appeals for the Second Circuit again reversed the conviction. It held that the manager’s testimony was erroneously admitted as his subjective belief as to an agency relationship was both irrelevant and misleading to the jury. The Court ordered Litvak, who had been incarcerated since September 2017, to be freed pending retrial.

    Earlier this month, the U.S. Court of Appeals for the Second Circuit denied the government’s motion for reconsideration. The government thus moved to dismiss the case against Litvak. 

    For the Record
    This case has again been remanded to the Court following an evidentiary ruling by the Second Circuit. Two juries have found the defendant Jesse C. Litvak guilty of securities fraud, the Court and the Second Circuit have twice found that there was sufficient evidence to support those convictions, and the Second Circuit has twice validated the Government’s prosecution theory and held that the defendant’s misrepresentations were not immaterial as a matter of law. Nonetheless, in light of the totality of the circumstances unique to this case, the Government has concluded that the interests of justice would not be served by a third trial.” – Government’s motion to dismiss

    The Take Away
    After two trials, five years of litigation, and months of incarceration as a result of two convictions, Jesse Litvak’s involvement with the federal criminal system has come to an end.  

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