Quantcast
Connect with us

Ex-Cantor Fitzgerald mortgage bond trader indicted in US for fraud

Published

on

A former Cantor Fitzgerald trader has been indicted on charges that he defrauded investors by lying about the price of mortgage bond transactions he handled for them after the financial crisis, U.S. prosecutors said on Friday.

David Demos, 35, was charged with securities fraud in an indictment filed in federal court in New Haven, Connecticut, becoming the latest trader to face charges for cheating customers on prices of mortgage-backed securities.

Demos, of Westport, Connecticut, appeared in court on Friday for an arraignment. In a joint statement afterwards, his legal team, which includes lawyers Peter Chavkin and Stanley Twardy, said Demos would fight the charges.

“Mr. Demos denies the charges made against him, including the allegations that his communications and negotiations with counterparties were ‘material,'” his lawyers said in the statement. “He intends to vigorously defend himself.”

Prosecutors said Demos, a trader and managing director at Cantor Fitzgerald from November 2011 to February 2013, defrauded customers by fraudulently inflating the price at which the company could buy residential mortgage-backed securities.

The goal, prosecutors said, was to induce customers to pay a higher price for mortgage bonds and to decrease the price at which Cantor could sell them in order to get investors to sell bonds at cheaper prices.

ADVERTISEMENT

The scheme allowed Cantor Fitzgerald and Demos to reap illegal profits, prosecutors said, while causing their customers to sustain millions of dollars of losses.

The victims included asset managers and firms affiliated with or subsidiaries of recipients of funds from the U.S. government’s financial crisis-era bailout program, the Troubled Asset Relief Program, prosecutors said.

The case marked the latest action by federal prosecutors in Connecticut against traders accused of cheating customers on prices of mortgage-backed securities.

In December 2015, a federal appeals court reversed a first conviction in the probe against Jesse Litvak, a former Jefferies managing director who was found guilty in 2014 and sentenced to two years in prison.

ADVERTISEMENT

Litvak, who denies wrongdoing, is scheduled to face re-trial on Jan. 4. Jefferies, a unit of Leucadia National Corp , in 2014 agreed to pay $25 million to end U.S. criminal and civil probes into how it supervised Litvak and other traders.

Others charged to date include two former Royal Bank of Scotland Group Plc traders, who have pleaded guilty, and three former traders at Nomura Holdings Inc <8604.T>, who are scheduled to face trial on Feb. 27.

The case is U.S. v. Demos, U.S. District Court, District of Connecticut, No. 16-cr-00220.

(Reporting by Nate Raymond in New York; Editing by Phil Berlowitz and Leslie Adler)

Report typos and corrections to [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Facebook

Matt Gaetz gets laughed at after his attempt to derail Mueller hearing hilariously backfires

Published

on

Rep. Matt Gaetz (R-FL) tried to turn the latest hearing on special counsel Robert Mueller's report on Russian interference in the 2016 presidential election into a hearing on border security -- and then got hilariously shut down by one of the panelists.

During his allotted time, Gaetz changed the subject away entirely from the Mueller report and decided to grill one of the witnesses for her views on border security.

In particular, Gaetz asked Carrie Cordero, a Robert M. Gates senior fellow and general counsel at the Center for New American Security, about her work writing about the security problems posed by Mexican drug cartels.

Continue Reading

Facebook

Lindsey Graham shoves Trump toward war: ‘Anyone would believe we’re one step closer’

Published

on

President Donald Trump seemed to try and deescalate the situation between Iran and the U.S. in wake of the former shooting down an American drone. But Sen. Lindsey Graham (R-SC) seems to be shoving the president toward war.

"I think anybody would believe that we’re one step closer" [to war], Graham told the press in the hallways of Congress Thursday. "They shot down an American asset, well within international waters -- trying to assess the situation. What are you supposed to do?"

Continue Reading
 

Facebook

Fireworks erupt at latest Mueller hearing as chairman Jerry Nadler schools GOP’s Jim Jordan

Published

on

A feisty Rep. Jerry Nadler (D-NY) schooled Rep. Jim Jordan (R-OH) for blatantly misstating facts about the investigation into potential coordination between the Trump campaign and the Russian government during the 2016 presidential election.

After Jordan went on a lengthy diatribe against the FBI for supposedly relying on the Steele dossier to launch an investigation against the Trump campaign, Nadler jumped in to formally correct the record.

"It is well established that the investigation was not predicated on the Steele dossier, but rather on the observation of..." Nadler began.

Continue Reading
 
 

Copyright © 2019 Raw Story Media, Inc. PO Box 21050, Washington, D.C. 20009 | Masthead | Privacy Policy | For corrections or concerns, please email [email protected]

I need your help.

Investigating Trump's henchmen is a full time job, and I'm trying to bring in new team members to do more exclusive reports. We have more stories coming you'll love. Join me and help restore the power of hard-hitting progressive journalism.

TAKE A LOOK
close-link

Investigating Trump is a full-time job, and I want to add new team members to do more exclusive reports. We have stories coming you'll love. Join me and go ad-free, while restoring the power of hard-hitting progressive journalism.

TAKE A LOOK
close-link