Bond traders just like ‘used car salesmen’

NEW HAVEN — The deceptive practices used by Wall Street bond traders are noworse than the ones used by “your local used car salesmen,” the lawyer for former Jefferies Group managing director Jesse Litvak told a federal court jury here on Thursday.

Litvak stands accused of lying to customers for two years about how much he paid for bonds.

The lies, federal prosecutors claim, led the customers to overpay for the bonds — and allowed Jefferies to boost its profits by $2.25 million from 2009 to 2011.

Litvak was convicted of the charges in 2014 and sentenced to two years in prison — making him one of the few Wall Streeters headed for incarceration because of his misdeeds.

But that conviction was overruled in 2015 — setting the stage for Thursday’s retrial.

The appeals court ruled that the trial judge erred by barring expert witnesses to testify on Litvak’s behalf.

In his opening statement, Litvak’s lawyer told jurors that Jefferies’ customers, including AllianceBernstein, were sophisticated enough not to be swayed by the trader’s lies.

They are “not sales techniques to be proud of,” the lawyer, Dane Butswinkas, said, but it is “not securities fraud.”

Butswinkas quickly ran through a number of statements Litvak is said to have madein his dealings with custom- ers, including, “We’re on the same page, big man, and “I’m willing to work for f--ing zero.”

He called the comments “used car salesman banter.” Prosecutors had a different take. “The evidence will show [Litvak’s] lies meant more money for Jefferies and less for customers,” Heather Cherry, an assistant US Attorney, told the jury.

The trial is expected to last three weeks.