Mortgage-backed securities price fraud prosecution rests case
After less than a week of trial, prosecutors rested their case against a former Cantor Fitzgerald trader accused of lying to his customers about bond prices.
Lawyers for David Demos haven't yet said if they will call witnesses in his defense when trial resumes April 30. Demos told the court on April 27 that he needs to consult with his attorneys before he decides whether to testify.
The government presented testimony from six witnesses, including representatives of Demos' alleged victims, Ellington Capital and Marathon Asset Management, who testified about their negotiations with Demos.
Demos is charged with defrauding investors in trades between May 2012 and January 2013 by misrepresenting the prices at which his firm would buy or sell mortgage backed securities. Prosecutors say he did so to boost the firm’s profit and increase his own bonus.
Defense attorneys have argued that the alleged victims were sophisticated investors who used complex analytics and disregarded statements made during negotiations.
In what may have been an effort to streamline the case for jurors, prosecutors presented fewer witnesses than they did in three prior trials focused on lies by bond traders.
Last year's trial against three former Nomura Holdings Inc. traders lasted for almost two months. Jurors cleared the defendants of the vast majority of the 27 charges, fully acquitting one, convicting one of conspiracy and failing to reach a verdict on a few other counts. A retrial in that case is scheduled for next month.