Sunday, May 24, 2015

U.S.: Wall St mortgage traders ripped off bank, investors

In 2008 crisis. Justice is slow; will it catch anyone beyond Credit Suisse?

U.S.: Wall St mortgage traders ripped off bank, investors

If you've been waiting for the government to try to send someone to prison for what Wall Street mortgage traders did to the economy in the 2008 crash:

Federal prosecutors in New York today charged three Credit Suisse Group traders - including Kareem Serageldin, Managing Director for Structured Credit at Crid Suisse Group - "with freaudulently inflating the prices" of subprime mortgage-backed bonds and commercial mortgage-backed securities in 2007-08.

SEC civil charges, too. More from Reuters here.

Traders' "alleged manipulation" of asset prices cost Credit Suisse more than $2.6 billion whle enabling traders "to secure significant year-end bonuses for themselves" ($7 million for Seragildin alone) at the bank's expense. Two Credit Suisse traders pled guilty to conspiracy to falsify books and records and are cooperating with the Government.

Treasury Secretary Timothy Geithner was quick to praise his government's action; less clear is whether the government is going after traders at Citi, JPMorgan, BofA, Wells Fargo, or other big (and US-based) banks where plenty of professionals also got rich trading overpriced bonds.

About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano