Bloomberg News

Ex-Credit Suisse CDO Banker Agrees to U.S. Extradition

January 14, 2013

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, agreed to be extradited to the U.S. to face the charges.

A U.K. judge ordered the extradition at a hearing this morning after Serageldin didn’t contest it, said Tim McAtackney, a spokesman for the U.K. Crown Prosecution Service. Peter Binning, Serageldin’s lawyer, didn’t immediately respond to requests for comment on the court ruling.

Serageldin was negotiating a deal with U.S. prosecutors when he was arrested in September outside the U.S. Embassy in London. At a hearing in the British capitol in November, Ben Brandon, another lawyer for Serageldin, said he was close to a plea agreement with the U.S. Department of Justice and awaiting a final reply.

A U.S. citizen who lives in England, Serageldin was charged in February with masterminding a scheme to fake collateralized debt obligations. The indictment accuses 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.

At the time he was first charged in Manhattan federal court, Serageldin said through his lawyers that he was surprised, since he had been cooperating with investigators for four 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 subordinates, David Higgs and Salmaan Siddiqui, pleaded guilty Feb. 1 in New York to manipulating CDO 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).

To contact the reporter on this story: Lindsay Fortado in London at lfortado@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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