Now it's time for our daily Bloomberg Law Brief, exploring legal issues in the news. The Bloomberg Law Brief brought to you by American Arbitration Association. Business disputes are inevitable resolved faster with the American Arbitration Association, the global leader in alternative dispute resolution for over ninety years. More at
a d r dot org. Today, Bloomberg Law host June Grasso and Michael Beast discussed the conviction of former Jeffreys Bond trader Jesse Litvak, who was found guilty of just one of ten counts of fraud. On Friday. They speak with Robert Hackett, professor at Cornell University Law School. Bob, is this a surprising verdict only one out of ten counts? I think it's all that surprising. I think what would have been truly surprising would have been if he had
been found guilty none of the counts. Um. I think that the thought was probably along the lines that what one conviction or one count is enough. The rest, in theory could be considered guilding the lily. They all sort of went to the same type of behavior, that is, not telling the truth and being fraud on what the price he paid for bonds was when he was selling
them to other people. So what distinction could the jury have drawn here between the count that they convicted him of and the nine counts that they acquitted him of. It's not altogether clear, but my guess would be that the jury was probably focusing, especially on the so called materiality of the misrepresentations. UH and materiality is a somewhat complex and sort of vaguely contoured concept that's used in
cases like this. It embraces, on the one hand, um, the sort of rationality of a particular customers allowing the information that he or she has given to influence his or her decision. That's an important part of it. And what that means in turn is that there's at least some relevance played in cases like this in the form of the degree of sophistication of the putative victims or
the plaintiffs. Right. So another way to put that a little bit more concretely would be to say, if I lied to, on the one hand, a very naive and unsophisticated investor, and then lied, on the other hand to a very sophisticated and highly skeptical investor. My lie to the first investor would be likely to be found a bit more material than with that to the second investor. That's Robert Hockett, professor at Cornell University Law School, speaking
with Bloomberg Law host June Grasso and Michael Best. You can listen to Bloomberg Law wheat days at one pm Blow Street Time here on Bloomberg Radio as this morning's Bloomberg Labrary. If you can find more illegal news at Bloomberg Law dot com and Bloomberg BNA dot com. Attorneys will find exceptional legal research and business development tools there as well. Visit Bloomberg Law dot com and Bloomberg BNA dot com for more information.