Kareem Serageldin

Kareem Serageldin (/ˈsɛrəɡɛldɪn/) (born in 1973) is a former executive at Credit Suisse. He is notable for being the only banker in the United States to be sentenced to jail time as a result of the financial crisis of 2007–2008, a conviction resulting from mismarking bond prices to hide losses.[1][2]

Kareem Serageldin
Born1973 (age 49–50)
Cairo, Egypt
EducationYale University (1994)
Known forThe only American to serve jail time as a result of the financial crisis of 2007–2008

Early life and education

Serageldin was born in Cairo, Egypt to parents of modest means. He moved to the United States as a child and spent most of his childhood in the Upper Peninsula of Michigan.[3][2] He graduated from Yale University in 1994.[4]

Career

Upon graduating in 1994, he joined the information technology department of Credit Suisse.[2] He moved to London 4 years later to work in the bank's catastrophe bonds business.[2][3] By age 33, he was named the global head of structured credit.[5] By 2007, he was supervising 70 employees and more than $50 billion in trading positions.[3] Despite earning approximately $7 million per year, Serageldin lived modestly; his apartment overlooking London Victoria station was described by his friends as "a grown-up dorm room".[2]

By early 2008, he was fired from Credit Suisse and was reported to the United States Attorney for the Southern District of New York for falsifying records.[2]

Conviction

On February 1, 2012, Serageldin was charged by Preet Bharara, the United States Attorney for the Southern District of New York, and the Federal Bureau of Investigation[6] as well as the U.S. Securities and Exchange Commission.[7]

On April 12, 2013, Serageldin pleaded guilty to fraudulently inflating the prices of asset-backed bonds which comprised subprime residential mortgage backed securities and commercial mortgage backed securities in Credit Suisse's trading book in late 2007 and early 2008.[8]

On November 22, 2013, Judge Alvin Hellerstein sentenced Serageldin to 30 months in prison.[9][3] Serageldin also agreed to return $25.6 million in compensation to Credit Suisse.[3]

On January 21, 2014, Serageldin was ordered to pay more than $1 million to settle the lawsuit by the U.S. Securities and Exchange Commission. He was also effectively barred from the securities industry.[3][10]

Serageldin said he committed the crime "To preserve my reputation in the bank at a time when there was great financial turmoil".[8]

He served at the Moshannon Valley Correctional Center[1] and was released in March 2016.[11]

See also

References
  1. "Why Only One Top Banker Went to Jail for the Financial Crisis". The New York Times. May 4, 2014.
  2. Eisinger, Jesse (April 30, 2014). "The Rise of Corporate Impunity". ProPublica.
  3. Raymond, Nate (November 22, 2013). "Former Credit Suisse trader Serageldin gets 30 months in jail". Reuters.
  4. "Kareem Serageldin '94: 'worst day of my life'". Yale Alumni Magazine. December 1, 2013.
  5. ABRAMS, RACHEL; LATTMAN, PETER (November 22, 2013). "Ex-Credit Suisse Executive Sentenced in Mortgage Bond Case". The New York Times.
  6. "Manhattan U.S. Attorney and FBI Assistant Director in Charge Announce Charges Against Two Former Credit Suisse Managing Directors and Vice President for Fraudulently Inflating Subprime Mortgage-Related Bond Prices in Trading Book" (Press release). Federal Bureau of Investigation. February 1, 2012.
  7. "SEC Charges Former Credit Suisse Investment Bankers in Subprime Bond Pricing Scheme" (Press release). U.S. Securities and Exchange Commission. February 1, 2012.
  8. LATTMAN, PETER (April 12, 2013). "Former Credit Suisse Executive Pleads Guilty to Inflating the Value of Mortgage Bonds". The New York Times.
  9. "Former Credit Suisse Managing Director Sentenced In Manhattan Federal Court To 30 Months In Prison In Connection With Scheme To Hide Losses In Mortgage-Backed Securities Trading Book" (Press release).
  10. "U.S. Securities and Exchange Commission, Plaintiff, v. Kareem Serageldin, David Higgs, Faisal Siddiqui and Salmaan Siddiqui, Defendants" (PDF). U.S. Securities and Exchange Commission.
  11. Cohan, William D. (July 21, 2016). "A Clue to the Scarcity of Financial Crisis Prosecutions". The New York Times.
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