I'm interested to see exactly what that cooperation entails...
Kareem Serageldin, the ex-global head of Credit Suisse Group AG (CSGN)’s CDO business charged in a bonus-boosting fraud tied to a $5.35 billion trading book, plans to fight extradition to the U.S. until he reaches a plea deal.
Serageldin’s lawyer told a London court yesterday that his client’s arrest this week outside the U.S. Embassy was a result of “miscommunication.” Ben Brandon said Serageldin was negotiating a plea bargain with U.S. prosecutors before the arrest. He was released on a 150,000-pound security ($243,000) until a Nov. 28 court hearing.
Serageldin was named in an indictment unsealed in February accusing him of conspiracy, falsification of books and records and wire fraud. The conspiracy charge carries a maximum five- year prison term on conviction. The other counts are punishable by as many as 20 years. The case is being investigated by agents of the Federal Bureau of Investigation in New York.
Two of his Serageldin’s subordinates, David Higgs and Salmaan Siddiqui, pleaded guilty Feb. 1 in New York to manipulating prices.
Higgs and Siddiqui admitted to manipulating the profit and loss targets at Serageldin’s direction to meet daily and monthly goals and increase their compensation. The bank said the three were fired in 2008.
Siddiqui, “together with his co-conspirators, manipulated and inflated ABS cash bond position markings in the ABN1 book in order to achieve specific daily and month-end profit and loss objectives; in other words, they artificially increased the price of bonds in order to create the false appearance of profitability in that trading book,” according to the criminal information to which he pleaded guilty. “Siddiqui engaged in this scheme in order to enhance his apparent job performance, knowing that his eligibility for CS bonuses was determined by his superiors,” according to the plea document.
Rather than mark the securities down to market as required, Higgs and other traders at Credit Suisse were directed by Serageldin to manipulate and inflate the “cash bond positions markings of a trading book referred to as ‘ABN1’ in order to hide losses,” Higgs said during his guilty plea.
Higgs said the manipulations gave senior management at Credit Suisse the false impression that the ABN1 book was profitable and caused Zurich-based Credit Suisse to report false year-end numbers for 2007 in its books and records.
Siddiqui told the judge during his plea that he mismarked the ABN1 book at the direction of superiors [...]
See the full article from Bloomberg.