Trial starts for Conn. trader charged with fraud

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NEW HAVEN, Conn. (AP) — A federal prosecutor says a former investment banker charged with defrauding investment funds established as part of the government's response to the financial crisis lied to clients about bond prices to increase profits.

But an attorney for Jesse C. Litvak rejected the government's case, saying Litvak sold bonds at great prices to sophisticated buyers. He says Litvak engaged in typical sales tactics and the government couldn't prove any losses.

Those comments came during opening statements Tuesday in New Haven, Conn., where Litvak faces trial on charges of fraud and making false statements to the federal government.

Litvak was a registered broker-dealer and managing director at Jefferies & Co. Inc.

The indictment alleges he engaged in a scheme to defraud customers on residential mortgage-backed securities trades of more than $2 million.

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