Friday, March 01, 2024


Westporter Cleared of Securities Fraud Charges

(Editor’s note: This story updates a story first published on Dec. 9, 2016.)

UPDATE A federal grand jury in Hartford has found a former Westport bond trader not guilty on six counts of securities fraud. Image
David Demos: caught up in fed crackdown. Contributed photo

David Demos, 36, who was employed by Cantor Fitzgerald & Co., was accused in December 2016 of fraudulently pricing residential mortgage-backed securities that federal investigators said cost lenders and other investors millions in losses.

The jury returned the verdict on May 3, 2018.

Outside the court, according to Bloomberg, Demos said: “Today’s verdict by the jury is a complete vindication of everything I’ve fought for, my family has fought for and my lawyers have fought for, for the past three years. Bluffing or lying or puffing about your cost in a negotiation was never a crime, is not a crime and should never be a crime.”

The not guilty finding in the Demos case came hours after the Second Circuit Court of Appeals vacated for the second time the conviction of former Jefferies Group LLC managing director Jesse Litvak, who was jailed for fraudulent bond-trading tactics.

Litvak’s arrest in 2013 sent shock waves through Wall Street and led to the resignations and suspensions of dozens of traders.

His acquittal, along with the not guilty finding in the Demos case, was seen as a stinging setback to prosecutors and their efforts to enforce a federal crackdown on questionable bond-trading tactics.

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