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Law School Case Brief

United States v. Litvak - 889 F.3d 56 (2d Cir. 2018)


The following factors are weighed in determining whether the admission of evidence was harmless: (1) the overall strength of the prosecutor's case; (2) the prosecutor's conduct with respect to the improperly admitted evidence; (3) the importance of the wrongly admitted testimony; and (4) whether such evidence was cumulative of other properly admitted evidence.


Jesse Litvak was convicted of 10 counts of securities fraud and various other counts of fraud and false statements. An appellate court reversed the convictions for fraud and false statements and vacated the securities fraud counts and remanded them for a new trial. At the second trial on 10 counts of securities fraud, Litvak was acquitted on nine of the 10 counts, each involving transactions similar to the one for which he was convicted. Litvak then challenged the conviction for one count of securities fraud, principally on the ground that his misstatements were, as a matter of law, immaterial to a reasonable investor in the market for residential mortgage-backed securities ("RMBS"). 


Was the conviction proper?




Although the Court rejected Litvak's argument his misstatements were immaterial to RMBS, the Court ruled that the district court erred in admitting evidence that the individual representing the counterparty in the transaction for which Litvak was convicted mistakenly believed Litvak to be an agent acting on the counterparty's behalf. That evidence, which was admitted as relevant to the materiality issue pursuant to Fed. R. Evid. 401, was prejudicial and the reviewing court could not conclude with fair assurance that the jury would have convicted Litvak absent such evidence. Thus, the conviction was vacated and case remanded. Litvak was also ordered to be released on bond pending further proceedings.

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