Kareem Serageldin, the ex-global head of Credit Suisse Group AG’s structured credit trading business, was sentenced to two and a half years in prison for his part in a scheme to falsify the value of mortgage-backed bonds in 2007.
U.S. District Judge Alvin Hellerstein, who presided over the case, also ordered Serageldin to pay a $150,000 fine. Serageldin pleaded guilty in April to a single count of conspiracy to falsify Credit Suisse’s books and records, which carried a maximum prison sentence of five years.
Serageldin said Nov. 22 that when he discovered subordinates falsifying the value of mortgage-backed bonds in late 2007, he joined the scheme rather than stop it. Serageldin said he sought to preserve his reputation in the bank at a time when there was great financial turmoil in the marketplace.
“I see I failed miserably in the decisions I made,” said Serageldin, whose lawyers had sought a term of probation for him.
Prosecutors claimed Serageldin marked up the collateralized debt obligations to meet targets and boost year-end bonuses for his $5.35 billion trading book, which was known as “ABN1,” at a time when the U.S. housing market was plummeting. After the scheme was discovered,
