Litvak Case Returns Again to Appeals Court in Long-Shot U.S. Bid

(Bloomberg) -- U.S. prosecutors aren’t yet finished with their case against former Jefferies Group LLC managing director Jesse Litvak, the first person charged in the crackdown on questionable tactics used by bond traders.

On Tuesday, they asked a federal appeals court in New York to reconsider its decision to throw out Litvak’s fraud conviction. Indicted in 2013, Litvak was released from a Florida prison in May after the appeals court reversed his conviction for a second time, saying the trial judge mistakenly allowed one of his customers to testify that he believed the mortgage-bond trader was acting as his agent.

The government said the court failed to consider that Litvak conceded that testimony that investors trusted him or thought he was working for their benefit was properly admitted as evidence. Such requests for reconsideration are usually rejected by appeals courts.

Litvak was the first of more than a half-dozen traders to be charged by U.S. authorities with fraud for lying to clients. His arrest in January 2013 put traders on notice that they could face criminal prosecution for making misrepresentations to customers while negotiating trades.

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