A former Nomura RMBS trader was recently convicted of fraud conspiracy.

Michael Gramins was an executive director on the residential mortgage backed securities (RMBS) desk at Nomura Securities International in New York, where he principally oversaw Nomura’s trading of bonds composed of sub-prime and option ARM loans.

Gramins engaged in a conspiracy to defraud customers of Nomura by fraudulently inflating the purchase price at which Nomura could buy a RMBS bond to induce its customers to pay a higher price for the bond. He also fraudulently deflated the price at which Nomura could sell a RMBS bond to induce its customers to sell bonds at cheaper prices, causing Nomura to profit illegally. Gramins trained subordinates to lie to customers, provided them with the language to use in deceiving customers, and encouraged them to engage in the practice.

The victims of this scheme included hedge funds, insurance companies and asset managers from Connecticut and elsewhere.

Gramins and two other former New York-based bond traders for Nomura, Ross Shapiro and Tyler Peters, were each charged in a third superseding indictment with one count of conspiracy, two counts of securities fraud and six counts of wire fraud on March 6, 2017.

Upon sentencing, Gramins faces up to five years in prison.