Trader Says TD Bank Fraudulent Deal Denied Fair Trial – BNN Bloomberg

(Bloomberg) — A former TD Bank trader accused of committing U.S. Treasury fraud has asked a federal judge to throw out the case, saying the government’s announcement of a settlement with the bank effectively denied him his right to a fair trial.

Jeyakumar Nadarajah, once TD Bank’s head of U.S. Treasury trading, was indicted in November 2023 on 16 counts of fraud and securities manipulation for allegedly placing “fake” orders to artificially increase prices. TD Bank last month agreed to pay more than $20 million as part of a settlement with U.S. prosecutors and regulators to resolve investigations into Nadarajah’s conduct.

But Nadarajah’s lawyers said in a court filing that the government’s announcement of the settlement subverted the “constitutional right to a fair trial” by telling the world that the merchant was guilty. Prosecutors violated Justice Department policy by issuing an opinion about a defendant before trial without using language indicating that Nadarajah was presumed innocent, according to the filing.

“Mr. Nadarajah, of course, has pleaded not guilty and is exercising his right to a jury trial; yet the government has taken the extraordinary step of appointing itself the arbiter of facts and law, displacing both the jury and the court, and declaring to the world that Mr. Nadarajah is guilty,” his attorney, William A. Burck, said in a lawsuit filed in federal court in New Jersey. opened.

In recent years, many traders have faced prosecution for the act of spoofing, placing and then canceling orders with the aim of creating a false impression in other market participants. If convicted at his trial next year, Nadarajah faces up to 20 years in prison for each count of wire fraud, securities fraud and securities manipulation.

Prosecutors and TD Bank declined to comment on the application.

He said TD Bank’s settlement contained a “brutal threat” that could put “intense and inappropriate” pressure on employees who might be called as witnesses in the Nadarajah case because they were represented by the same lawyers as the bank that negotiated the settlement with the government. The government may be required to “state exactly what it alleges and prove that it has convicted Mr. Nadarajah.”

“Mr. According to the application, Nadarajah believes that if these witnesses answered honestly, they would contradict the prior information they provided to the government, particularly after-the-fact information and opinions regarding Mr. Nadarajah’s dealings.

The 14-page indictment does not name the financial institutions where Nadarajah worked, but industry records show he was at TD Bank and most recently Jefferies at the time of the alleged conduct.

TD Bank’s decision on the fraud investigation came just a week before the bank pleaded guilty and agreed to pay almost $3.1 billion in fines and other penalties in an unrelated case of failing to prevent money laundering.

The case is US v Nadarajah, 23-cr-891, US District Court, Southern District of New York.

(Adds TD Bank declined to comment)

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