The United States Securities and Exchange Commission (SEC) and former Nomura trader Michael Gramins continue to make meaningful progress in settlement discussions. This becomes clear from a status report filed by the regulator on December 22, 2021, in the New York Southern District Court.
Let’s recall that, in this case, the SEC targets Ross Shapiro, Michael Gramins, and Tyler Peters. As FX News Group has reported, SEC and Gramins have been engaged in settlement discussions for several months.
Gramins was an Executive Director on the Residential Mortgage Backed Securities (“RMBS”) Desk at Nomura Securities International (“Nomura”) in New York where he principally oversaw Nomura’s trading of bonds composed of sub-prime and option ARM loans. Between 2009 and 2013, Gramins and others defrauded 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.
Gramins trained subordinates to lie to customers, provided them with the language to use in deceiving customers, and encouraged them to engage in the practice.
The victims of this scheme included hedge funds, insurance companies, and asset managers from Connecticut and elsewhere.
The SEC launched a lawsuit against Gramins, Peters, and Shapiro in September 2015. The Commission charged the three traders with fraud.
According to the latest status report, while the SEC and Gramins do not yet have a settlement in principle to propose to the Court, and the staff would still need to seek authorization from the Commission to settle on any terms eventually agreed upon, the parties have exchanged drafts of a written agreement.
With respect to the criminal case against Mr. Gramins, his appeal to the Second Circuit remains pending, as does the Government’s motion for restitution before Judge Chatigny.