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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Tue, 02/25/2014 - 12:16 | 4475537 HyBrasilian
HyBrasilian's picture

So many Muppets ~ So little time!

Tue, 02/25/2014 - 12:18 | 4475553 NotApplicable
NotApplicable's picture

A.K.A. "Serious Business."

Tue, 02/25/2014 - 12:22 | 4475578 pods
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.

pods

Tue, 02/25/2014 - 12:33 | 4475639 Herd Redirectio...
Herd Redirection Committee's picture

I also "generally consider myself truthful".

Say what?  From Honest Abe to this?

Tue, 02/25/2014 - 12:38 | 4475660 Divided States ...
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.

Tue, 02/25/2014 - 12:41 | 4475685 DavrosoftheDaleks
DavrosoftheDaleks's picture

Superstar Billy Graham was the real deal:

https://www.youtube.com/watch?v=cMgjtZWY9u8

Tue, 02/25/2014 - 12:43 | 4475699 TeamDepends
TeamDepends's picture

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

Tue, 02/25/2014 - 12:48 | 4475725 dontgoforit
dontgoforit's picture

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

Tue, 02/25/2014 - 13:06 | 4475820 mayhem_korner
mayhem_korner's picture

 

 

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

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

Mark Antony, Julius Caesar

Tue, 02/25/2014 - 13:29 | 4476024 NoDebt
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?
Tue, 02/25/2014 - 13:00 | 4475736 Emergency Ward
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.

Tue, 02/25/2014 - 13:53 | 4476232 akarc
akarc's picture

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

You mean it isn't?

Tue, 02/25/2014 - 14:14 | 4476379 Chupacabra-322
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.

Tue, 02/25/2014 - 14:42 | 4476546 akarc
akarc's picture

Upped ya fer funny

Tue, 02/25/2014 - 15:29 | 4476786 sgt_doom
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.

Tue, 02/25/2014 - 12:24 | 4475596 unrulian
unrulian's picture

he's just being honest

Tue, 02/25/2014 - 12:51 | 4475745 Divided States ...
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.

Tue, 02/25/2014 - 13:01 | 4475789 Drifter
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.

Tue, 02/25/2014 - 13:15 | 4475910 TheFourthStooge-ing
TheFourthStooge-ing's picture

He's lying through his fucking teeth.

Tue, 02/25/2014 - 12:32 | 4475637 Bokkenrijder
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.

Tue, 02/25/2014 - 12:33 | 4475643 Richard Chesler
Richard Chesler's picture

...and presidents.

 

Tue, 02/25/2014 - 12:23 | 4475587 Alpo for Granny
Alpo for Granny's picture

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

Tue, 02/25/2014 - 12:26 | 4475607 RaymondKHessel
RaymondKHessel's picture

Guys like these ~ They Do Grow On Trees!

Tue, 02/25/2014 - 14:39 | 4476213 akarc
akarc's picture

and  seed the land across America spreading kudzu

Tue, 02/25/2014 - 13:06 | 4475821 doctor10
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

Tue, 02/25/2014 - 12:16 | 4475539 JLee2027
JLee2027's picture

The corrupt are always moral in their own minds.

Tue, 02/25/2014 - 12:22 | 4475579 NotApplicable
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.

Tue, 02/25/2014 - 13:48 | 4476192 akarc
akarc's picture

Liar

Tue, 02/25/2014 - 12:37 | 4475662 asteroids
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.

Tue, 02/25/2014 - 14:00 | 4476280 Carbon Beach
Carbon Beach's picture

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

Tue, 02/25/2014 - 12:18 | 4475548 CaptainSpaulding
CaptainSpaulding's picture

Hmmmmm

Tue, 02/25/2014 - 12:18 | 4475552 chaartist
chaartist's picture

really surprising..

Tue, 02/25/2014 - 12:19 | 4475557 TruthInSunshine
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!"

Tue, 02/25/2014 - 12:20 | 4475566 Max Damage
Max Damage's picture

No nail guns near the twat then?

Tue, 02/25/2014 - 12:21 | 4475569 jcaz
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....

Tue, 02/25/2014 - 17:00 | 4477194 FrankDrakman
FrankDrakman's picture

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

Tue, 02/25/2014 - 12:22 | 4475570 Colonel Klink
Colonel Klink's picture

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

Tue, 02/25/2014 - 12:43 | 4475642 TruthInSunshine
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.

WHEN MONEY IS ONE'S TRUE GOD/RELIGION

WORSHIP OF GOLDEN CALVES

LIKE THAT

Tue, 02/25/2014 - 12:46 | 4475717 Colonel Klink
Colonel Klink's picture

Nothing changes until you start lopping of heads!

Tue, 02/25/2014 - 12:21 | 4475573 LordAarioc
LordAarioc's picture

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

Tue, 02/25/2014 - 12:22 | 4475580 the not so migh...
the not so mighty maximiza's picture

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

Tue, 02/25/2014 - 12:59 | 4475790 Emergency Ward
Emergency Ward's picture

Free Jon Corzine !

Tue, 02/25/2014 - 13:45 | 4476165 akarc
akarc's picture

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

Tue, 02/25/2014 - 12:24 | 4475581 Dr. Engali
Dr. Engali's picture

"When it becomes serious you have to lie."

 

Juncker~

 

It's embedded in the system.

Tue, 02/25/2014 - 12:41 | 4475684 SDShack
SDShack's picture

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

Tue, 02/25/2014 - 12:22 | 4475583 zipit
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?

Tue, 02/25/2014 - 12:23 | 4475586 drendebe10
drendebe10's picture

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

Tue, 02/25/2014 - 12:28 | 4475612 gmrpeabody
gmrpeabody's picture

Just what are you implying...?

;-)

Tue, 02/25/2014 - 13:43 | 4476146 akarc
akarc's picture

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

Liar

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