Securities Traders Accused Of Misleading Investors About Their Trading Profits

On behalf of Wolf Popper LLP

In securities trading, there is a lot of opportunity for deception and misleading consumers. Driven by the hope of getting a good deal and profiting on investments, investors can easily be lead astray by unethical traders.

This is highlighted in recent cases involving securities fraud charges against traders working at Nomura Securities International. Two of the firm's former senior traders, according to the Securities and Exchange Commission, generated hundreds of thousands of dollars in profits from trading commercial mortgage-backed securities by lying to customers about several aspects of bonds trading. 

Specifically, the SEC accused the traders of lying about the prices the firm paid or received in the purchase and sale of bonds, bids and offers made or received for bonds, and the difference between bond bids and ask prices. The result, according to the SEC, was that customers were deceived about how much the firm was earning in the sale of bonds. Together, the traders earned Nomura over $750,000 in illegal profits. As of earlier this week, one of the traders had settled the charges with the SEC, agreeing to pay a $150,000 penalty, $51,965 in disgorgement, an equitable remedy under the Securities and Exchange Act, and $11,758 in interest. The case against the other trader is still pending.

Another set of securities fraud cases, also involved three former Nomura traders who supervised the firm's residential mortgage-backed securities desk. They are on trial for lying to customers about securities prices in order to increase their profits. One particularly interesting aspect of these cases is that the legal defense the traders are trying to make is not that they didn't lie to customers, but that their lies did not constitute fraud.

In our next post, we'll look further at this case, and why it is so important to work with an experienced attorney when pursuing compensation for securities fraud.


Hartford Courant, "Bond Traders Fight Fraud Charges With Novel Defense," Edmund H. Mahony, May 8, 2017., "Ex-Nomura Traders Accused of Commercial Mortgage Backed Securities Fraud," Matthew Heller, May 16, 2017.