Ex-Credit Suisse CDO Chief Pleads Not Guilty in Fraud
Kareem Serageldin, the ex-global head of Credit Suisse Group AG (CSGN)’s structured credit trading business, pleaded not guilty to charges he led a 2007 scheme to mark up the value of debt securities to meet targets and boost year-end bonuses for his $5.35 billion trading book.
Serageldin, a U.S. citizen who lives in England, was taken into custody by the Federal Bureau of Investigation yesterday after he was extradited from the U.K., Assistant U.S. Attorney Eugene Ingoglia told U.S. Magistrate Judge Kevin Fox at Serageldin’s arraignment Friday in Manhattan.
Fox ordered Serageldin released on $1.5 million bond, to be co-signed by his brother and guaranteed with $750,000 in cash, a bail package agreed between Serageldin and prosecutors before the court proceeding. Serageldin is scheduled to return to court April 12.
Last year, two of his former subordinates, David Higgs and Salmaan Siddiqui, pleaded guilty to overstating the value of mortgage-backed assets in a Credit Suisse trading book known as ABN1 after the collapse of the U.S. housing market. Both said they acted at Serageldin’s direction and agreed to cooperate with prosecutors.
Credit Suisse fired all three employees in 2008 and cooperated with the government’s investigation. Serageldin was charged with conspiracy, falsification of books and records and wire fraud. He was arrested outside the U.S. consulate in London in September.
Sean Casey, a lawyer for Serageldin, declined to comment on the case after the arraignment. Victoria Harmon, a spokeswoman for Zurich-based Credit Suisse, declined to comment.
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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