Credit Suisse Employee Accused of Securities Fraud

Credit Suisse Employee Accused of Securities Fraud

By John Curran

For many investors, the successful outcome of stock fraud lawsuits is a civil action where they recoup some of their lost income. While it is much more rare, criminal actions also serve a benefit as a deterrent to other company officials who may be considering cooking the books. In the worst case of securities fraud, that may indeed come to fruition, with a U.S. banking official extradited from London to face charges here.

Kareem Serageldin was one of a number of bankers who was supposed to valuate mortgage securities, in this case for Credit Suisse (NYSE: CS). In an industry where bonuses are often paid as a fraction of the value produced, making any bonds or other investment products more expensive would help the Swiss bank. Serageldin earned $7.3 million in 2007 before his superiors clawed back $5.2 million after learning of the securities fraud.

The U.S. Attorney in Manhattan filed criminal charges and the court in Westminster, England, alleging that Serageldin improperly inflated the value of mortgage-backed securities to the tune of $450 million, or more than 15 percent higher than their previous value. The Securities and Exchange Commission wants to know why the Credit Suisse employee did so while telling co-workers that the market was tanking.

If it goes to trial as expected, it would be one of the more high profile cases in criminal courts for the securities fraud allegedly committed by major banks. The SEC has already settled with most for a fraction of the amount they allegedly defrauded investors, and does little for those who would allege stock fraud based on the value of the financial services companies that tanked during the Great Recession of 2008.

On the other hand, it would represent at least some sort of redress for the many people who saw their retirement accounts decimated as a result of investing in companies perceived as safe options.

People who have seen stock portfolios tank as a result of perceived corporate malfeasance do have their own legal options. Civil claims should be pursued with the help of a securities fraud lawsuit attorney. Learn more at the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation. Filling out the short form there entitles one to a free consultation. Eligible claims can be filed to recoup some of the losses of an investment. It costs nothing, but a securities fraud lawsuit attorney may provide much more value than any other choices.

Updated January 16th, 2013

All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions