Michael Gramins, RMBS Trading Fraud, Connecticut 2017

A federal jury in Hartford, Connecticut has found MICHAEL GRAMINS, 33, of New York, N.Y., guilty of conspiracy to commit securities and wire fraud.

According to the evidence presented at trial, GRAMINS was an Executive Director on the Residential Mortgage Backed Securities (“RMBS”) Desk at Nomura Securities International (“Nomura”) in New York, where he oversaw Nomura’s trading of bonds composed of sub-prime and option ARM loans. GRAMINS engaged in a conspiracy to defraud 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.

The victims of this scheme included hedge funds, insurance companies, and asset managers from Connecticut and elsewhere.

On March 6, 2017, GRAMINS and two other former New York-based bond traders for Nomura, Ross Shapiro and Tyler Peters, were each charged in a third superseding indictment with one count of conspiracy, two counts of securities fraud and six counts of wire fraud.

When sentenced, GRAMINS faces a maximum term of imprisonment of five years.

The case is being prosecuted by Assistant U.S. Attorneys Liam Brennan, Heather Cherry, and David Novick.

U.S. Attorney Deirdre M. Daly commended the investigative work of SIGTARP, the FBI, the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and the Federal Housing Finance Agency’s Office of Inspector General in this and related cases.

This matter has been investigated by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Federal Bureau of Investigation, the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and the Federal Housing Finance Agency’s Office of Inspector General.

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