On March 7, 2014, a senior Jefferies & Co., Inc. (Jefferies) employee, Jesse C. Litvak, was convicted by a Connecticut jury of 15 counts of federal securities fraud and other violations arising out of the sales tactics he used in selling bonds.  Litvak was a licensed broker who was employed as a senior trader and managing director at Jefferies.  He specialized in trading residential mortgage-backed security (RMBS) bonds.  He sold RMBS bonds to customers that included U.S. government-sponsored Public-Private Investment Funds, which were established in 2009 and 2010 under the Troubled Asset Relief Program.  A March 12, 2014 panel discussion organized by the law firm Richards Kibbe & Orbe LLP (RKO) addressed the fraud allegations, the legal arguments adduced by the prosecution and defense and the lessons from Litvak’s conviction.  The panel featured RKO partners Lee Richards III, Daniel Stein and David Massey, all former Assistant U.S. Attorneys, and Michael Mann, a former SEC Director of the Office of International Affairs.  This article summarizes the main points from the discussion, which should inform interactions between hedge fund managers that trade fixed income securities and their brokers.  For additional insight from RKO partners, see “Succession Planning Series: Selling a Hedge Fund Founder’s Interest to an Outside Investor (Part Two of Two),” Hedge Fund Law Report, Vol. 7, No. 2 (Jan. 16, 2014); “Convertible Preferred Stock: How Preferred Is It? (Part Two of Two),” Hedge Fund Law Report, Vol. 7, No. 1 (Jan. 9, 2014); and “An Examination of Exit Rights for Hedge Funds Making Non-Controlling Private Equity Investments,” Hedge Fund Law Report, Vol. 6, No. 28 (Jul. 18, 2013).