| NEW YORK, July 30
NEW YORK, July 30 A former Credit Suisse AG
trader avoided prison on Wednesday for his role in
artificially inflating subprime mortgage bond prices, in one of
the few U.S. criminal cases to stem from the financial crisis.
Salmaan Siddiqui, who pleaded guilty in 2012 to one
conspiracy count and agreed to cooperate with the government,
was ordered to forfeit $150,000 by U.S. District Judge Paul
Crotty in New York but did not receive any prison term.
A former colleague, David Higgs, pleaded guilty on the same
day in 2012 and was sentenced to no prison time last month,
largely due to the help he provided prosecutors.
The two men had worked for Kareem Serageldin, once Credit
Suisse's global head of structured credit. Prosecutors accused
the three men of mismarking the values of subprime
mortgage-backed bonds between August 2007 and February 2008 as
housing and credit markets spiraled downward.
Serageldin pleaded guilty in April 2013 and was sentenced to
2-1/2 years in prison.
Assistant U.S. Attorney Eugene Ingoglia said Siddiqui
provided "substantial assistance," helping prosecutors bring a
case against Serageldin that would have otherwise been difficult
Siddiqui, 39, a married father of two, said he followed
orders from his superior instead of reporting him to the
"I wish I had the courage to stand my ground and say no," he
told Crotty. "I assure you, I will never allow my ethics or
judgment to be compromised ever again."
The price manipulation, spearheaded by Serageldin, was
intended to enhance his reputation within the bank by making it
appear that the trading book he oversaw was profitable,
The effort contributed to a $2.65 billion writedown, though
prosecutors said at Serageldin's sentencing that his book was
only overstated by $100 million.
Credit Suisse was not accused of wrongdoing and cooperated
with government investigators.
The case bears some similarities to the "London Whale"
prosecution of two former JPMorgan Chase & Co traders, Javier
Martin-Artajo and Julien Grout.
Prosecutors have accused the two men of conspiring to mark
positions in a credit derivatives portfolio at inflated prices
to hide hundreds of millions of dollars in losses.
The men were indicted last year for securities fraud, wire
fraud and conspiracy; they are considered fugitives for refusing
to come to the United States to face trial.
A lawyer for Grout, a French national, has indicated that
Grout may be willing to consider a bail package that would call
for him to travel to the United States to answer the charges.
Martin-Artajo, who lives in Spain, is fighting extradition.
The case is U.S. v. Siddiqui, U.S. District Court for the
Southern District of New York, 12-cr-89.
(Reporting by Joseph Ax; Editing by Leslie Adler)