NEW HAVEN, Conn. (AP) — A federal judge sentenced a former Wall Street trader to two years in prison on Wednesday for securities fraud, saying he took advantage of a government bailout program.
The judge also fined Jesse Litvak $1.75 million.
"This was a market that was dead in the water," Judge Janet Hall told Litvak. "This was a market that existed because of taxpayer money and you were in effect taking advantage of it through fraud."
Litvak was found guilty in March of securities fraud, Troubled Asset Relief Program fraud and making false statements to the federal government. He was the first person convicted of a crime related to the program that used bailout funds in the financial meltdown to restart trading markets for mortgage-backed securities.
Litvak defrauded private investment funds and funds established by the U.S. Treasury with government bailout money in response to the 2008 financial crisis, prosecutors said. They say Litvak duped 35 victims into paying artificially increased prices or accepting artificially decreased prices for bonds they were buying or selling, netting $6.3 million in fraudulent profits for the company for which he worked.
"The government hopes that this sentence and this prosecution sends a strong message to Wall Street and those on Wall Street that lie to their customers and cheat the investors," U.S. Attorney Deirdre Daly said.
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