SEC Ends Suit Against Former Jefferies Trader Cleared of Fraud

(Bloomberg) -- The U.S. Securities and Exchange Commission agreed to drop a lawsuit against former Jefferies Group LLC trader Jesse Litvak, who was cleared in August of criminal charges that he lied to customers about bond prices in trades of mortgage-backed securities following a five-year legal odyssey.

Litvak, the first person charged in a crackdown on questionable tactics used by bond traders, was found guilty of securities fraud last year and served seven months of a two-year prison sentence before an appeals court threw out his conviction for a second time in May and ordered him released. A federal judge dismissed the remaining charge in August.

On Tuesday, the SEC said a parallel lawsuit has been administratively closed since December 2014 and the parties agreed dismissal is appropriate. While Litvak and more than a half-dozen other traders were charged as part of a sweeping investigation into dubious practices used by Wall Street firms, none have been convicted at trial.

The case is Securities and Exchange Commission v. Litvak, 13-cv-00132, U.S. District Court, 13-cv-00132, U.S. District Court, District of Connecticut (New Haven.)

To contact the reporter on this story: Chris Dolmetsch in Federal Court in Manhattan at cdolmetsch@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider

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