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January 14, 2013 3:24 pm
A British court has approved the extradition to the US of a former Credit Suisse banker who has been accused of inflating the value of mortgage securities during the financial crisis.
Kareem Serageldin, the former head of Credit Suisse’s structuring products group, was arrested last year by the Metropolitan Police outside the US consulate in London.
US prosecutors, who are seeking his extradition, allege that from August 2007 until February 2008, Mr Serageldin directed bankers in New York and London to manipulate prices of mortgage securities to give the false impression that their trading books were profitable.
Mr Serageldin, who lives in London, was paid a bonus of more than $1.7m in 2007 and received a $5.2m incentive award, which was later rescinded.
Westminster magistrates’ court ruled on Monday that the case would now go before Theresa May, the Home Secretary, who must make the final decision on the extradition within two months.
Judge Quentin Purdy said Mr Serageldin, who was in court on Monday morning, must continue to abide by his bail conditions which include a curfew at his home address and surrendering his UK passport to police.
Mr Serageldin and two others were charged by the US authorities with manipulating the value of certain mortgage securities to inflate their bonuses. The two former bankers who reported to him have pleaded guilty and co-operated with authorities.
Credit Suisse, which has not been accused of wrongdoing, took a $2.6bn writedown in March 2008, of which $540m was linked to the bankers’ actions, according to court papers. The bank discovered the mispricing in early 2008 and reported it to US and UK authorities.
The case is one of the first from the credit crisis dealing with the issue of valuation and one of the first where US prosecutors are seeking the extradition of a UK banker.
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