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, is in late-stage talks with U.S. authorities on a plea agreement.
Ben Brandon, Serageldin’s lawyer, told a London court today “our expectation is that the discussions will be fruitful” with the U.S. Justice Department and it’s unlikely that there would have to be an extradition hearing.
The case was adjourned until Jan. 14 so talks could continue. Serageldin was negotiating a deal with U.S. prosecutors when he was arrested in September outside the U.S. Embassy in London.
Serageldin, a 39-year-old U.S. citizen who lives in England, was charged in February with masterminding a scheme to fake collateralized debt obligations. At the time when he was first charged in Manhattan federal court, Serageldin said through his lawyers that he was surprised, since he had been cooperating with U.S. investigators for four years.
“I can say that we are close,” Brandon said today. “I’m able to say that a final reply is awaited from the Department of Justice.”
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.
Serageldin, who was born in Egypt, wants to renounce his U.S. citizenship and serve part of any sentence in the U.K., Brandon told the London court on Sept. 27.
Two of his Serageldin’s subordinates, David Higgs and Salmaan Siddiqui, pleaded guilty Feb. 1 in New York to manipulating prices.
The U.S. criminal cases are U.S. v. Higgs, 12-cr-00088, and U.S. v. Siddiqui, 12-cr-00089, U.S. District Court, Southern District of New York (Manhattan). The SEC case is U.S. Securities and Exchange Commission v. Serageldin, 12-cv-00796, U.S. District Court, Southern District of New York (Manhattan).
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