A former Cantor Fitzgerald trader has been indicted on charges that he defrauded investors by lying about the price of mortgage bond transactions he handled for them after the financial crisis, U.S. prosecutors said on Friday.
David Demos, 35, was charged with securities fraud in an indictment filed in federal court in New Haven, Connecticut, becoming the latest trader to face charges for cheating customers on prices of mortgage-backed securities.
Demos, of Westport, Connecticut, appeared in court on Friday for an arraignment. In a joint statement afterwards, his legal team, which includes lawyers Peter Chavkin and Stanley Twardy, said Demos would fight the charges.
“Mr. Demos denies the charges made against him, including the allegations that his communications and negotiations with counterparties were ‘material,'” his lawyers said in the statement. “He intends to vigorously defend himself.”
Prosecutors said Demos, a trader and managing director at Cantor Fitzgerald from November 2011 to February 2013, defrauded customers by fraudulently inflating the price at which the company could buy residential mortgage-backed securities.