A US federal appeals court in New York vacated the criminal conviction of Jesse Litvak, a former securities broker and trader at Jefferies & Company, for making material misstatements to several of Jefferies’ counterparties—including certain private public investment funds—in connection with their purchases and sales of residential mortgage-backed securities between 2009 and 2011. (PPIFs are financial vehicles to purchase pools of loans, securities or other assets from a financial institution, funded in part by private investors, and in part by funds provided by the Department or Treasury or other government-appropriated funds.) In an indictment filed against him in January 2013, Mr. Litvak was charged with securities fraud, fraud against the United States and making false statements, and convicted on all but one count following a jury trial in a US trial court in February and March 2014. Mr. Litvak promptly filed an appeal. The appellate court reversed the trial court’s conviction of charges of making false statements and fraud against the United States as it concluded that Mr. Litvak could not have made any statements that were materially false to the United States. This is because the Department of Treasury had no legal authority to make purchase decisions for the PPIF clients. Thus, Mr. Litvak’s alleged misstatements had no ability to influence a decision of the Department of Treasury to invest — a pre-requisite to his conviction, said the appellate court. In addition, the appellate court vacated Mr. Litvak’s conviction on the securities fraud counts, claiming that the trial court improperly excluded certain testimony of expert witnesses on behalf of Mr. Litvak. Mr. Litvak was sentenced to two years in prison and required to pay a US $1.75 million fine following his conviction.