Former Credit Suisse executive Kareem Serageldin can be extradited to the US to face fraud charges, rules court

 

A former Credit Suisse executive can be extradited to the US to face fraud charges, a court ruled today.

Kareem Serageldin is alleged to have distorted the value of mortgage securities while working at the banking giant during the financial crisis.

Prosecutors claim that the 39-year-old conspired with two of his employees to hide the deteriorating condition of the housing market in 2007 in order to keep the value of bonds based on subprime mortgages artificially high and thereby fattening their bonuses.

Serageldin, a US citizen living in London, was slated to receive more than 7 million dollars in compensation before the company learned about the alleged fraud and withheld 5.2 million dollars of his pay.

He appeared at Westminster Magistrates Court today, with a court spokesman saying his extradition had been ordered and the case sent to Home Secretary Theresa May for approval.

Serageldin, the former global head of structured credit at Credit Suisse, was arrested in September last year.

He has been charged with conspiracy, falsifying books and records, and wire fraud in the US.

The charges carry a potential penalty of 45 years in prison.

Serageldin was released on bail pending the approval of his extradition, the court confirmed. His lawyers Corker Binning declined to comment after the hearing.

The alleged fraud, which prosecutors described last year as "a tale of greed run amok", was blamed for a portion of a $2.65bn(£1.64bn) write-down Credit Suisse announced in March 2008.

Two other Credit Suisse traders pleaded guilty to conspiracy charges in cooperation deals with prosecutors in February 2012.

At the time, prosecutors urged Serageldin to return to the US and answer the charges against him.

The subprime mortgage crisis fuelled the financial meltdown in 2008. US federal regulators have brought civil charges against several big Wall Street firms accused of misleading investors about securities linked to risky mortgages in the years leading up to the financial crisis.

The biggest settlement of the Securities and Exchange Commission's charges was with Goldman Sachs in July 2010. The firm agreed to pay 550 million dollars (£342m).

PA

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