Ex-Jefferies trader's jury edges toward verdict, stalls on two counts

By Andy Thibault

NEW HAVEN, Conn. (Reuters) - The U.S. jury weighing whether a former Jefferies Group LLC bond trader cheated his customers on bond prices signaled it may be near a verdict, despite being deadlocked on two of the 10 securities fraud counts the defendant faced.

"I read it as if they have a partial verdict; I don't know that," Chief Judge Janet Hall told the defendant Jesse Litvak, his lawyers and federal prosecutors in her New Haven, Connecticut, courtroom.

Jurors have deliberated for four days on the fate of Litvak, who prosecutors said generated $2.25 million of illegal profit by misleading customers including AllianceBernstein Holding LP (AB.N) and Soros Fund Management about bond prices from 2009 to 2011.

Litvak had been found guilty of the same fraud counts and other charges in March 2014, in a trial where Hall also presided, only to have that verdict and his two-year prison sentence overturned on appeal. A retrial began early this month.

"I sure don't want to try this three times," Hall told the courtroom, outside the presence of jurors.

But she later decided to give the jury an "Allen charge," which is given when there is an elevated risk of a hung jury, and often entails asking holdouts whether they might wish to reconsider their positions.

Jurors will resume deliberations on Thursday. It is unclear what they may have decided on the other eight counts.

During the trial, prosecutors said Litvak's "lies" to customers were motivated by greed, and caused them to overpay for bonds they bought and accept less for bonds they sold.

But defense lawyers argued that Litvak's customers were intelligent, sophisticated investors who would know if Litvak were trying to deceive them, and would not let him succeed.

Litvak had worked in the Stamford, Connecticut office of Jefferies, a unit of Leucadia National Corp (LUK.N).

The outcome of his trial could have a bearing on the fates of three traders from Nomura Holdings Inc , two from Royal Bank of Scotland Group Plc (RBS.L) and one from Cantor Fitzgerald & Co accused of similar wrongdoing.

The case is U.S. v. Litvak, U.S. District Court, District of Connecticut, No. 13-cr-00019.

(Reporting by Andy Thibault in New Haven, Connecticut; Editing by Chris Reese)