Former Jefferies chief Jesse Litvak wants his conviction dismissed

Former Jefferies managing director Jesse Litvak has warned a US appeals court that his conviction for securities fraud could be used to ensnare the car salesmen he was compared to at the time of his arrest.

Litvak, who was found guilty in March of lying to customers about the price of mortgage-backed securities, asked the US Court of Appeals in Manhattan to throw out the conviction, saying it could be used to turn "garden-variety statements" made in all kinds of negotiations into the basis for criminal charges.

"Every car salesman who tells a customer that he cannot lower his price any further because he would earn only a minuscule profit on the sale as it is would be guilty of fraud," Litvak's lawyers said in a filing.

Litvak said the judge in the case that led to his conviction, the first connected with a US programme that used bailout funds to spur investment in mortgage-backed securities, gave "deficient" jury instructions and excluded key defence evidence.

Litvak was accused of defrauding investors of US$2 million by misrepresenting how much sellers were asking for the securities, or what customers would pay, and keeping the difference for Jefferies. George Canellos, former deputy director of the US Securities and Exchange Commission, said after Litvak was arrested in January last year that his claims were "unfit for a used-car lot".

"The government prosecuted Mr Litvak for conduct that was not a crime," his lawyers said in the filing.