A trader at the centre of the sub-prime mortgage securities scandal at Credit Suisse in London was unmasked yesterday as he pleaded guilty to falsifying the books in a New York court.
David Higgs, who worked as a managing director in the investment banking division in Credit Suisse in London in 2007 and 2008, surrendered to US authorities yesterday to face criminal charges that he and some colleagues inflated the value of mortgage securities in the bank's portfolio.
The overstatement forced Credit Suisse to announce a $2.85bn (£1.8bn) writedown in March 2008, a month after finding "mismarkings" by a group of unnamed rogue traders. This is the first time that Mr Higgs has been identified as one of the traders involved.
Mr Higgs, who was fired from Credit Suisse in 2008, pleaded guilty to a charge of conspiracy to falsify books and records and commit wire fraud, which carries a prison sentence of up to five years.
"Today is a terribly difficult day for me and my family. I am truly sorry," said Mr Higgs, adding that he falsified the records to improve the look of his performance to his boss, Kareem Serageldin, and, in turn, his bonus.
He alleged that Mr Serageldin directed him and other traders at Credit Suisse to manipulate figures "in order to hide losses", Bloomberg News reported. It is not known whether Mr Serageldin is facing charges.