A TD Bank merchant says the spoofing agreement denies him a fair trial

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A former Toronto-Dominion Bank trader charged with defrauding US Treasuries has asked a federal judge to throw out the case, saying the government’s announcement of a settlement with the bank denied him the right to a fair trial.

Jeyakumar Nadarajah, TD Bank’s former head of US Treasuries trading, was indicted in November 2023 on 16 counts of fraud and securities fraud for allegedly placing “fake” orders to illegally inflate prices. TD Bank last month agreed to pay more than US$20 million as part of a settlement with US prosecutors and regulators to resolve an investigation into Nadarajah’s conduct.

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But Nadarajah’s lawyers said in a court filing that the government’s announcement of the deal changed the “constitutional right to a fair trial” by telling the world that the businessman was guilty. Prosecutors violated Justice Department policy by releasing pretrial motions without including language indicating Nadarajah is presumed innocent, according to the filing.

“Mr. Nadarajah, of course, has denied the charges and is exercising his right to a trial; however, the government took the extraordinary step of appointing itself the arbiter of truth and law, dismissed both the judges and the court, and announced to the world that Mr. Nadarajah is guilty,” said his attorney, William A. Burck, in a filing in New Jersey district court.

Several traders have faced prosecution in recent years for manipulation, placing and canceling orders to create a false impression on other market participants. Nadarajah faces up to 20 years in prison on each count of fraud, embezzlement and debt if he is convicted next year.

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Prosecutors and TD Bank declined to comment on the filing.

He said TD Bank’s settlement contains a “great threat” that will put “great and undue” pressure on employees who may be called as witnesses in Nadarajah’s case because they are represented by the same lawyers as the bank who negotiated the settlement with the government as well. he may be called upon to “testify precisely what the government alleges and must prove in order to convict Mr. Nadarajah.”

“Mr. Nadarajah believes that, if those witnesses answer truthfully, they will contradict the previous information they gave the government, especially the latest information and opinions about Mr.

The 14-page indictment does not name the financial institutions where Nadarajah previously worked, but industry records show he was at TD Bank at the time of the alleged conduct and most recently at Jeffery Financial Group Inc.

TD Bank’s decision on the spoofing investigation came one week before it pleaded guilty to an unrelated charge of failing to prevent money laundering and agreed to pay nearly $3.1 billion in fines and other penalties.

The case is US v. Nadarajah, 23-cr-891, US District Court, Southern District of New York.

Bloomberg.com

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