Former TD Bank trader says spoofing deal denies him a fair trial

financialpost.com:

A former Toronto-Dominion Bank trader charged with spoofing U.S. Treasuries asked a federal judge to throw out the case, saying the government’s announcement of a settlement with the bank effectively denied him the right to a fair trial.

Jeyakumar Nadarajah, who was once TD Bank’s head of U.S. Treasuries trading, was indicted in November 2023 on 16 counts of fraud and securities manipulation for allegedly placing “spoof” orders to artificially drive up prices. TD Bank last month agreed to pay more than US$20 million as part of an agreement with U.S. prosecutors and regulators to resolve investigations into Nadarajah’s behaviour.

But Nadarajah’s lawyers said in a court filing that the government’s announcement of the deal turned “the constitutional right to a fair trial on its head” by telling the world that the trader was guilty. Prosecutors violated Justice Department policy by issuing opinions about a defendant before trial without inserting language indicating that Nadarajah is presumed innocent, according to the filing.

“Mr. Nadarajah has, of course, pleaded not guilty to the offences and is exercising his right to a jury trial; nonetheless, the government has taken the extraordinary step of appointing itself the decider of fact and law, displacing both the jury and the court, and announced to the world that Mr. Nadarajah is guilty,” his lawyer, William A. Burck, said in the filing in federal court in New Jersey.

Several traders have faced prosecution in recent years for spoofing, the act of placing and then cancelling an order to create a false impression to other market participants. Nadarajah is facing as much as 20 years in prison for each count of wire fraud, securities fraud and securities manipulation if