CRIMINAL CAPITALI$M
Jefferies Trader Is Charged With Spoofing at Earlier TD Bank Job

Chris Strohm and Katherine Doherty
Thu, November 9, 2023


(Bloomberg) -- A Jefferies Group trader was charged with fraud for alleged placing “spoof” orders to manipulate the market for US Treasuries while at a former employer, TD Bank.


Jeyakumar Nadarajah was indicted in New Jersey federal court, the Justice Department announced Wednesday. Nadarajah was charged with 16 counts of fraud and securities manipulation based on actions taken between April 2018 and May 2019. At that time, Nadarajah was TD Bank’s head of US Treasuries trading.

The 14-page indictment doesn’t name the financial institutions where has Nadarajah worked, but industry records show he was at TD Bank at the time of the alleged crime and most recently at Jefferies.

A lawyer for Nadarajah said his client was released following a hearing on Wednesday.

“Jack is innocent of these charges, which focus on a handful of trades which took place more than four and a half years ago,” Michael S. Schachter, a lawyer at Willkie Farr & Gallagher LLP, said in a statement. “He looks forward to being vindicated in court.”

Jefferies declined to comment. A spokesperson for TD Bank didn’t immediately respond to a request for comment.

“By placing one or more spoof orders to buy US Treasuries products, Nadarajah intended to inject false and misleading information about genuine demand into the market and to manipulate and artificially increase the market prices of those products,” prosecutors said.

Several traders have faced prosecution in recent years for spoofing, the act of placing and then cancelling order to create a false impression of demand to other market participants.

Nadarajah faces a maximum penalty of 20 years in prison for each count of wire fraud, securities fraud and securities manipulation if convicted.

--With assistance from Chris Dolmetsch.

Bloomberg Businessweek