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Ex-Credit Suisse Traders Charged
Three ex-Credit Suisse traders have been charged with manipulating the value of mortgage-backed securities with a view to inflating their own bonuses.
The SEC has charged Kareem Seragelden, David Higgs and Salmaan Siddiqui with conspiracy to defraud. All of the individuals have pleaded guilty and are co-operating with the authorities.
Credit Suisse, which has not been charged with wrong-doing, took a $ 2.6 billion write-down in 2008. It is understood that $ 540 million relates to these traders actions.
Mr. Serageldin was paid a bonus of $ 1.7 million in 2007 and received a $ 5.2 million award which was later rescinded.
It is alleged that he directed traders to manipulate the values of these bonds including making up prices and ignoring the benchmark ABX index. There is one instance where a trader asked a friend at another institution to provide a fraudulent price.
How robust are your valuation controls?
