The United States Securities and Exchange Commission (SEC) today provided an update to the New York Southern District Court regarding its case against former Nomura traders Michael A. Gramins, Tyler G. Peters, and Ross B. Shapiro.
The document, seen by FX News Group, concerns the criminal and civil cases against defendant Michael Gramins.
The parties have met and conferred, and anticipate scheduling a meeting with officials in the SEC’s Enforcement Division in the coming weeks regarding the disposition of the case against Mr. Gramins.
If those discussions do not result in a potential resolution of the civil action, the parties will discuss a potential modification of the stay in this case to permit limited third party discovery, including the depositions of investor-witnesses, pending the resolution of the parallel criminal case.
The parties do not believe that a settlement conference would be fruitful at this time.
Let’s recall that, in December 2020, Gramins was sentenced to two years of probation for defrauding mortgage-backed securities customers of Nomura Securities International, where he was employed. Judge Chatigny also ordered Gramins to perform 300 hours of community service.
According to the evidence presented during his trial, Gramins was an Executive Director on the Residential Mortgage Backed Securities (“RMBS”) Desk at Nomura Securities International (“Nomura”) in New York where he principally oversaw Nomura’s trading of bonds composed of sub-prime and option ARM loans. Between 2009 and 2013, Gramins and others defrauded customers of Nomura by fraudulently inflating the purchase price at which Nomura could buy a RMBS bond to induce their victim-customers to pay a higher price for the bond, and by fraudulently deflating the price at which Nomura could sell a RMBS bond to induce their victim-customers to sell bonds at cheaper prices, causing Nomura to profit illegally.
Gramins trained subordinates to lie to customers, provided them with the language to use in deceiving customers, and encouraged them to engage in the practice.
The victims of this scheme included hedge funds, insurance companies, and asset managers from Connecticut and elsewhere.
The SEC launched a lawsuit against Gramins, Peters, and Shapiro in September 2015. The Commission charged the three traders with fraud.
The SEC alleges that Ross Shapiro, Michael Gramins, and Tyler Peters defrauded customers to illicitly generate millions of dollars in additional revenue for Nomura Securities International, the New York-based brokerage firm where they worked. They misrepresented the bids and offers being provided to Nomura for RMBS as well as the prices at which Nomura bought and sold RMBS and the spreads the firm earned intermediating RMBS trades. They also trained, coached, and directed junior traders at the firm to engage in the same misconduct.