Nomura traders plead not guilty to deceiving bond customers

by MPA11 Sep 2015
(Reuters) - Three former Nomura Holdings Inc traders on Thursday pleaded not guilty to criminal charges that they deceived customers about bond prices in a fraudulent effort to boost profits, federal prosecutors said.
Ross Shapiro, Michael Gramins and Tyler Peters entered their pleas to securities fraud, wire fraud and conspiracy charges before U.S. Magistrate Judge Donna Martinez in Hartford, Connecticut, a spokesman for U.S. Attorney Deirdre Daly said.
Each defendant was released on $1 million bond and ordered to surrender his passport. A trial is scheduled for Nov. 10.
Prosecutors on Tuesday accused the defendants of inducing some customers to sell mortgage bonds at low prices, and other customers to buy the same bonds at high prices, and pocketing the differences.
Shapiro had led the residential mortgage-backed securities desk at Nomura Securities International, and oversaw trading of those securities.
Gramins focused on bonds backed by subprime and adjustable-rate mortgages, while Peters focused on bonds backed by prime and low-documentation "Alt-A" mortgages.
The pleas were entered as a federal appeals court in New York weighs whether to overturn the conviction and two-year prison sentence of former Jefferies Group Inc trader Jesse Litvak for similar alleged wrongdoing.
Daly's office also handled Litvak's case, as well as a similar case against bond trader Matthew Katke, who pleaded guilty in March to cheating customers at Royal Bank of Scotland Group Plc.
Katke retained a right to withdraw his plea if the appeals court voided Litvak's conviction. Jefferies is a unit of Leucadia National Corp.
The case is U.S. v. Shapiro et al, U.S. District Court, District of Connecticut, No. 15-cr-00155. (Reporting by Jonathan Stempel in New York; Editing by Tom Brown)



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