News - Regulation
A UK bond trader has pleaded guilty to overstating the value of mortgage-backed bonds when working at Credit Suisse at the start of the financial crisis.
US prosecutors allege Mr Higgs began overstating the value of mortgage-backed bonds in a trading book between August 2007 and February 2008, the Telegraph reports.
Higgs pleaded guilty in a New York court on Wednesday to conspiring with at least one former colleague to falsify the accounts of a multi-billion dollar trading book at the Swiss bank. He faces up to five years in prison and a fine.
Government prosecutors alleged Higgs sought to inflate the value of the bonds in the trading book to ensure he qualified for a bonus at the end of 2007.
Credit Suisse was forced to write down the value of its trading books by $2.65bn (£1.7bn) in spring 2008, with $540m of that from the trading book Higgs allegedly inflated. A lawyer for Mr Higgs could not be reached for comment.
A second trader Salmaan Siddiqui, who worked for Mr Higgs, has also pleaded guilty.
The group are the first traders in the USA to face criminal prosecution for problems in the mortgage market leading up to the credit crisis.
Categories: Regulation
Topics: Credit suisse
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