The U.S. Securities and Exchange Commission (SEC) has agreed to dismiss, in full and with prejudice, securities fraud claims it brought against Alston & Bird client Tyler Peters, a former residential mortgage-backed securities (RMBS) trader at Nomura Securities International Inc.
The SEC first asserted those claims in 2015, when it filed a complaint in the U.S. District Court for the Southern District of New York, naming Peters and two of his former co-workers as defendants. The SEC alleged that between 2009 and 2013, Peters engaged in a scheme to mislead trading counterparties about the price of RMBS, as well as the amount of compensation Nomura would receive in connection with certain RMBS transactions.
The SEC’s decision to drop the case was disclosed in a court filing on November 5, 2019, in U.S. district court in Manhattan.
“The SEC’s filing represents a complete and total vindication for Mr. Peters, who has been in the crosshairs of a series of lawsuits and prosecutions in federal court for the past four years and who has seen his life turned upside down,” said Alston & Bird partner Brett D. Jaffe, who led Peters’ defense and is co-head of the firm’s Litigation & Trial Practice Group. “We would like to thank the SEC enforcement staff for their willingness, following extensive discovery, to re-examine the claims against Mr. Peters and ultimately dismiss them in the interest of justice.”
The SEC’s decision to dismiss the enforcement action against Peters follows his 2017 acquittal at trial on all criminal charges, a case in which Alston & Bird also represented Peters. Peters was indicted in September 2015, along with two other Nomura traders, on nine counts of conspiracy, securities fraud, and wire fraud by the U.S. Attorney’s Office for the District of Connecticut. After seven weeks of trial and lengthy jury deliberations, Peters was acquitted on all counts.
The criminal and civil cases brought against Peters stemmed from a broad government investigation following the prosecution of Jesse Litvak, an RMBS trader at Jefferies & Co. Inc. That investigation resulted in numerous criminal and civil settlements with RMBS traders at various Wall Street banks. Peters is the only defendant in any of these cases to be acquitted at criminal trial and obtain dismissal of the civil case against him.
Representing Peters are Alston & Bird partner Brett D. Jaffe, counsel Joseph Tully, senior associates Kim Chemerinsky and David Wohlstadter, and associates Christopher Borchert and Jenna Jones, all of whom are in the firm’s Litigation & Trial Practice Group.
The case is SEC v. Shapiro, et al., No. 1:15-cv-07045, in the U.S. District Court for the Southern District of New York.