Former bond trader Michael Gramins was sentenced in Connecticut federal court to six months of home confinement for his role in a pricing scheme involving residential mortgage-backed securities.

Gramins, 38, of North Carolina, was sentenced last week to two years of probation, including six months of home confinement, for defrauding mortgage-backed securities customers of Nomura Securities International, where he was employed, according to a statement from the U.S. attorney’s office. Gramins must also perform 300 hours of community service.

According to evidence presented during his trial, Gramins was an executive director on the residential mortgage-backed securities desk at Nomura Securities International in New York, principally overseeing Nomura’s trading of bonds composed of sub-prime and option ARM loans.

Between 2009 and 2013, Gramins and others defrauded Nomura’s customers by fraudulently inflating the purchase price at which Nomura could buy an RMBS bond to induce their victim-customers to pay a higher price for the bond, according to the U.S. attorney’s statement, and by fraudulently deflating the price at which Nomura could sell an RMBS bond to induce their victim-customers to sell bonds at cheaper prices, causing Nomura to profit illegally.

Gramins allegedly 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, according to the U.S. attorney’s office.

On June 15, 2017, a jury found Gramins guilty of one count of conspiracy to commit securities and wire fraud, and not guilty of one count of securities fraud and five counts of wire fraud. The jury could not reach a verdict as to one count of securities fraud and one count of wire fraud.

No other traders were convicted in the yearslong case. Gramins’ conviction was initially overturned before being reinstated by a U.S. appeals court last year.

In a settlement announced by the U.S. Securities and Exchange Commission in July 2019, Nomura agreed to pay approximately $25 million in restitution to customers for its failure to adequately supervise traders in mortgage-backed securities, and an additional $1.5 million in penalties.