Federal prosecutors are said to be preparing to bring criminal charges against Adam Siegel, a top trader at the Royal Bank of Scotland, for allegedly manipulating the price of complex debt securities, The Post has learned.
Deirdre M. Daly, Connecticut’s top federal prosecutor, is building a case against Siegel and RBS, which used to house its bond trading unit in Stamford, for lying to purchasers — such as hedge funds — about how much the bank paid for bundles of debt, two sources familiar with the investigation told The Post.
Siegel, who headed the securitized debt trading desk at RBS, left the bank last year after being put on leave. He later worked for hedge fund Fortress Investment Group, but no longer is employed at the company or any of its affiliates, Gordon Runté, a Fortress spokesman, told The Post.
“I can’t talk about anything,” Siegel told The Post when reached on his cell phone. “I’m about to take off on an airplane.”
Daly has been relying on the testimony of Matthew Katke, a former RBS trader who pleaded guilty in March to defrauding customers in the collateralized loan obligation market, The Post first reported last week.
The federal probe comes as an appeals court weighs whether to toss the 2014 conviction of Jesse Litvak, an ex-Jefferies trader who was sentenced to two years in jail for lying to customers about bond pricing.
Litvak was found guilty by a federal jury in New Haven, Conn., of securities fraud and making false statements for claiming the bank paid more than it did for securities of bundled home loans.
One judge on the US Court of Appeals in New York has questioned whether Litvak did anything wrong.
There’s a “certain amount of license and puffery” in the negotiations between bond traders, US Circuit Judge Barrington D. Parker said in May during a hearing.
The appeals court is expected to rule soon on Litvak’s appeal
A spokesman for Daly’s office declined to comment. An RBS spokesman has declined to comment on the investigation, citing previous disclosures in regulatory documents.