Tags: nomura | mortgage | bond | traders

US Charges Ex-Nomura Mortgage Bond Traders for Defrauding Investors

US Charges Ex-Nomura Mortgage Bond Traders for Defrauding Investors
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Tuesday, 08 September 2015 02:11 PM EDT

U.S. prosecutors on Tuesday charged three former traders at Nomura Holdings Inc with misleading investors by lying about mortgage bond prices after the financial crisis.

Ross Shapiro, Michael Gramins, and Tyler Peters, who had worked for Nomura since 2009, were charged in an indictment filed in federal court in New Haven, Connecticut, with counts including securities and wire fraud.

"This indictment alleges that, for several years, these three defendants handsomely profited by repeatedly lying to Nomura's customers in violation of federal law," Connecticut U.S. Attorney Deirdre Daly said in a statement.

Shapiro, 41, Gramins, 33, and Peters, 32, were expected to be arraigned on Thursday. Their lawyers did not immediately respond to requests for comment.

The case marked the latest in a series of enforcement actions by federal prosecutors in Connecticut against traders accused of cheating their customers on prices of mortgage-backed securities.

A U.S. appeals court is weighing whether to reverse the 2014 conviction in a similar case of former Jefferies Group Inc managing director Jesse Litvak, who was sentenced to two years in prison.

A former Royal Bank of Scotland Group Plc trader, Matthew Katke, meanwhile, pleaded guilty in March and agreed to cooperate with authorities.

In the Nomura case, authorities said that Shapiro, Gramins and Peters conspired to defraud customers to generate millions of dollars in additional revenue for the bank.

Prosecutors said the trio fraudulently inflated and deflated the prices at which Nomura could buy or sell mortgage bonds to induce customers to either pay higher prices or sell them for cheaper.

The indictment said the three men trained their subordinates to lie to customers and created fake third parties to increase their profits.

The U.S. Securities and Exchange Commission filed a related civil lawsuit in Manhattan against the three men.

Daly said in a statement that her office's investigation into "corrupt practices in the mortgage bond market continues.

The case is U.S. v. Shapiro, U.S. District Court, District of Connecticut, No. 15-cr-00155.

© 2024 Thomson/Reuters. All rights reserved.


Personal-Finance
U.S. prosecutors on Tuesday charged three former traders at Nomura Holdings Inc with misleading investors by lying about mortgage bond prices after the financial crisis. Ross Shapiro, Michael Gramins, and Tyler Peters, who had worked for Nomura since 2009, were charged in...
nomura, mortgage, bond, traders
327
2015-11-08
Tuesday, 08 September 2015 02:11 PM
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