US says Credit Suisse traders falsified books
SEVERAL former Credit Suisse traders manipulated the books on mortgage-backed securities when the US real estate market slumped in 2007 and 2008, a former London-based trader at the investment bank admitted in court yesterday.
The former trader, David Higgs, pleaded guilty in US District Court in New York to a criminal charge of conspiracy to commit falsification of books and to commit wire fraud. He is cooperating in a US government investigation on the writedowns of subprime mortgage derivatives at the height of the financial crisis.
The investigation stems from $2.85bn (£1.79bn) in writedowns that Credit Suisse took on collateralised debt obligations in 2008. Credit Suisse blamed the losses on a group of rogue traders and on a failure of internal controls. Credit Suisse was not charged in the case. A spokesman for the firm declined to comment yesterday.