Appellate Court Rules On Securities Expert Witness Testimony

The U.S. Court of Appeals 2nd Circuit vacated Jesse Litvak’s securities fraud conviction saying the lower court improperly excluded parts of his expert witness’s testimony. Securities expert witness Dr. Ram Willner, a business school professor and former portfolio manager, was hired by the defense to testify on how investment managers operate. However, U.S. District Judge Janet Hall disallowed his testimony.  The appellate court found that if the defense team had been able to introduce some of Willner’s testimony, a jury might have acquitted the former Jefferies & Company securities broker and trader.

Found guilty in 2014 of fifteen criminal counts, including ten counts of securities fraud, Litvak was sentenced to two years in prison. In addition, on January 22, 2015, the Securities and Exchange Commission barred Litvak “from associating with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.”

In United States v. Litvak, the appellate court wrote:

In respect of the fraud against the United States and making false statements counts, we conclude that the evidence adduced at trial provided an insufficient basis for the jury to find that the defendant’s misstatements were material to the government. In respect of the securities fraud counts, we conclude that the District Court exceeded its allowable discretion in excluding certain portions of the defendant’s proffered expert testimony, and that such error was not harmless.


About Karen Olson

Information Professional with twenty years experience in legal, public record, and business research. Fifteen years law firm experience.

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