GREENWICH, Conn. -- Adam Siegel of Greenwich pleaded guilty Monday in Hartford federal court to participating in a multimillion-dollar securities fraud scheme, according to Deirdre M. Daly, U.S. Attorney for Connecticut.
Siegel, 37, former co-head of U.S. Asset-Backed Securities, Mortgage-Backed Securities and Commercial Mortgage-Backed Securities Trading at RBS Securities Inc. in Stamford, pleaded guilty to conspiracy to commit securities fraud and also entered into an agreement to cooperate with the government’s ongoing investigation, Daly said.
According to court documents and statements made in court, between July 2008 and 2014, Siegel, along with other RBS employees that he supervised on a Stamford-based trading floor, traded fixed income investment securities such as residential mortgage-backed securities and collateralized loan obligations under a scheme where they misrepresented inflated prices to their customers and then convinced the customers to accept deflated prices for the bonds, all to benefit RBS.
At least 35 victims, including firms affiliated with recipients of federal bailout funds, lost millions of dollars, Daly said.
“Current regulations governing many fixed income products allow broker-dealers to operate in secrecy,” Daly said in a statement. “But as the Court of Appeals for the Second Circuit recently reminded us in United States v. Litvak, under the securities laws, broker-dealers do not have a license to lie to their customers. Today’s plea is the most recent step in our continuing investigation into those who prey on fixed income investors."
"Others with relevant information should follow Mr. Siegel’s example and cooperate with us," Daly continued. "We thank [the Special Inspector General for the Troubled Asset Relief Program] and the FBI for their hard work to date on this investigation. We are committed to our various investigations into the fixed income markets, and will continue to work with SIGTARP and the FBI, as well as our partners at the Department of Labor Office of the Inspector General, the Federal Housing Finance Administration Office of Inspector General, and the Fraud Section of the Department of Justice.”
As part of the scheme, Siegel and his co-conspirators made misrepresentations to induce buying customers to pay inflated prices and selling customers to accept deflated prices for bonds, all to benefit RBS.
Siegel, who was released on a $250,000 bond, is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on March 11, where he faces five years in prison.
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