Why a Jury Is Pondering When Bond Traders Can Lie: QuickTake Q&A
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A federal jury in Hartford, Connecticut, is weighing fraud charges against three former mortgage-bond traders over their conduct while working for Nomura Holdings Inc. The case has drawn broad attention because of the unusual questions the jury is being asked to consider: When is it all right to deceive a customer, and when is it not? How big does a lie have to be to be a fraud? Is it OK to lie if you assume your customer assumes you’re lying, because everybody lies?
Ross Shapiro, Michael Gramins and Tyler Peters are accused of lying to customers about the prices of mortgage-backed securities, and training subordinates to do the same, in order to boost their compensation. They are charged with conspiracy and fraud.