Wall Street Trader: "My Lying Is Part Of Making Deals Although I Generally Consider Myself A Truthful Person"

Tyler Durden's picture

The story of former Jefferies MBS trader Jesse Litvak, who is currently on trial in New Haven federal court accused of defrauding investors of $2 million by lying on trades of mortgage-backed securities, is well known to regular readers: it was summarized previously in "We Are Doneski Gorgeous!" - How Bond Trading On Wall Street Really Works. In that article we showed, more than just an isolated case of alleged fraud, that when it comes to OTC trades which do not transact on an exchange but instead take place over the phone between a salesman and a buyer, it is all a game of lies, fraud and misinformation... however one which both it is a game of lies, fraud and misinformation. Today, Mr. Litvak confirmed as much when he said, quoting Bloomberg,  "My lying is part” of making deals, he said, “although I generally consider myself a truthful person."

And that, in a nutshell is not only Wall Street, but how Wall Street perceives itself: a business in which "truthful people" must resort to lying - even if that means being sued for fraud - to make a living.

More on this story from Bloomberg:

Litvak, 39, is on trial in New Haven federal court accused of defrauding investors of $2 million by lying on trades of mortgage-backed securities. He’s the only person charged with fraud in connection with an initiative to distribute more than $20 billion from the Troubled Asset Relief Program, which the U.S. government created during the 2008 credit crisis to help bail out banks.


Joel Wollman, a portfolio manager with QVT Financial LP, testified yesterday that he told Litvak that his firm’s limit for a bond purchase was 57 cents on the dollar because anything more than that wouldn’t provide a 10 percent yield.


Under cross-examination from John Hillebrecht, one of Litvak’s attorneys, Wollman admitted he told another broker that he’d get a 10 percent yield at 58 cents on the dollar, and that he wasn’t telling the whole truth to Litvak. The charges against Litvak include claiming that a third party was selling the bonds when Jefferies was the actual holder.


“Volunteering information would not give me an edge, keeping information would give me an edge,” Wollman said.


You want the other guy to believe something that may not be entirely accurate,” Smith asked Lemin, Magnetar’s assets manager. “Isn’t that the case?”


“It is one of the strategies,” Lemin said. “For what I do in mortgages, it is appropriate to use skepticism.” The perception that the other side either withholds information or tells falsehoods “is exactly why I don’t say, ‘How high?’ when they tell me to jump,” Lemin said.

One can only hope that retail consumers, or what little is left of them, will do the same and use "skepticism" in following the rest of the herd right over the cliff as the second dot com bubble, one which has now engulfed the entire market, finally bursts.

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HyBrasilian's picture

So many Muppets ~ So little time!

pods's picture

This guy couldn't carry the shinebox of the guy who shines Corzine's shoes.

$2 million?  Really?  

Oh well, sleep with dogs, get some sticky stuff on your pantleg. Or something to that effect.


Herd Redirection Committee's picture

I also "generally consider myself truthful".

Say what?  From Honest Abe to this?

Divided States of America's picture

Any moron should know lying is rampant on Wall Street...if something is a sure thing that guarantees you 20% return for life...then why the fuck are these phonies selling it to you and not taking it for themselves.

If you let these snakes take advantage of you, then you probably still think WWE is the real deal.

TeamDepends's picture

I'll tell you the truth, but I sometimes lie.

dontgoforit's picture

BHO considers himself a truthful person too.  You can keep your debt (here, let me give you another helping.  There.)

mayhem_korner's picture



Friends, Romans, countrymen, lend me your ears...

...So are they all, all honourable men.

Mark Antony, Julius Caesar

NoDebt's picture

Shakespeare?  No, man.  Caddyshack:

Smails: Good, good. You know, despite what happened, I'm still convinced that you have many fine qualities. I think you can still become a gentleman someday if you understand and abide by the rules of decent society. There's a lot of...well, badness in the world today. I see it in court every day. I've sentenced boys younger than you to the gas chamber. I didn't want to do it- I felt I owed it to them. The most important decision you can make right now is what you stand for- goodness...or badness.
Danny: Now I know I've made some mistakes in the past. I'm willing to make up for that. I want to be good!
Smails: Very good! I know how hard it is for young people today and I want to help. Just ask my grandson, Spaulding. He and I are regular pals. Are you my pal..."Mr. Scholarship Winner"?
Danny: Yes, sir! I'm your pal!
Smails[ruffles Danny's hair] How about a Fresca?
Emergency Ward's picture

****  Our past performance graph is modeled on the S&P Index return over the last year and not on the actual return of the holdings in our portfolio.

akarc's picture

" you probably still think WWE is the real deal."

You mean it isn't?

Chupacabra-322's picture

Me grabbing you by the neck, dragging you into the street & visciously beating you to death will make the world a better place. Although, I consider myself to be a peaceful person.

sgt_doom's picture

A crucial point:  one of the first actions President Roosevelt took after his election to the White House was to put forth the Truth in Securities Act criminalizing lying, while during the Clinton Administration (and Clinton did veto this, but the House overrode his veto) the Private Securities Litigation Reform Act was passed, providing immunity from prosecution to lying attorneys, accountants, and I believe also derivatives dealers.

At least Clinton got one thing right, not that it mattered in the end.

Divided States of America's picture

Yeah, I am a greedy bastard so instead of taking your money straight from your hands, I give you worthless junk for it.

Drifter's picture

When the going gets tough, lie.  It doesn't have to get very "tough" either.  People lie when it's merely convenient to lie.

Most Americans are that way.  Another reason America isn't worth saving.

TheFourthStooge-ing's picture

He's lying through his fucking teeth.

Bokkenrijder's picture

Come on, now don't act like this is NEWS! The same goes for 2nd hand car salesmen, real estate agents etc etc.

Alpo for Granny's picture

You can't make a Hampton omelet without first breaking some muppet eggs.

RaymondKHessel's picture

Guys like these ~ They Do Grow On Trees!

akarc's picture

and  seed the land across America spreading kudzu

doctor10's picture

Is there such a thing as sociopsychopath? Or a psychosociopath? Is one merely a politican, and the other a banker? Or is it vice-versa?


Inquring minds would like to know

JLee2027's picture

The corrupt are always moral in their own minds.

NotApplicable's picture

It amazes me how few realize this. Instead they choose to equate Hitler with the persona of "Dr. Evil" rather than the fact that he was "do-gooder" of the nth degree.

asteroids's picture

The BLS, FED, Obozo, military, etc... all believe that lying to the muppets is ok don't and don't think its wrong. Man, how evil. The devil is laughing at the hell we are creating for ourselves.

Carbon Beach's picture

The projected truth is a matter of perception based on margin.

chaartist's picture

really surprising..

TruthInSunshine's picture

"I lie to my clients on a daily basis, essentially stealing from them & their families for my excess gain during the regular course of my employment, but I am an honorable person. Shalom out!"

Max Damage's picture

No nail guns near the twat then?

jcaz's picture

LOL- arguing over a penny-  whether it was 57 or 58 cents, it was a shit deal, both sides knew it... 

Still, going to jail for something so minor is pretty amusing-  until the 6 months suspended sentence hits-

It's all just big show, as usual....

FrankDrakman's picture

On $250 million of MBS, 1 cent is $2.5 million. May be chump change to you, but not to me.

Colonel Klink's picture

It's ok, everyone he was ripping off wasn't part of the club.

TruthInSunshine's picture

They rip each other off like you literally wouldn't believe. Just...trust me on this.
- I've seen it many times, it always plays out the same ugly way, and I've seen 7 and even 8 digit losses accrue to individuals who were co members of the same tribes, whether Jews, Italians or Macedonians.

These sociopaths, who may be of any race or religion (truly) enjoy kicking people when they're most down, too.

As a famous example, probably 50% (and probably more like 75%) of Madoff's victims were fellow Jews, including Synagogues, Universities (Yeshiva) and charities.




Colonel Klink's picture

Nothing changes until you start lopping of heads!

LordAarioc's picture

Lying through their teeth day in day out to a tune of 2 million. Forked Tongue yet like a snake ?

the not so mighty maximiza's picture

enough of the low level fucks, let get the big guys

akarc's picture

And then do we go after ourselves? Before? After? Cause until we do we change nothing.

Dr. Engali's picture

"When it becomes serious you have to lie."




It's embedded in the system.

SDShack's picture

It goes deeper then that. It's embedded in sociopaths's DNA.

zipit's picture

How many guys have to confess that the business of Wall Street IS lying before people believe him.  What would Spock say?

drendebe10's picture

"truthful person". Just like yhe arrogant narcissistic illegal alien kenyan muslim liar in chief sciopath.

gmrpeabody's picture

Just what are you implying...?


akarc's picture

"Just like yhe arrogant narcissistic illegal alien kenyan muslim liar in chief sciopath."