Ex-Credit Suisse trader pleads not guilty to MBS price inflation

by 08 Apr 2013

(Reuters) - A former Credit Suisse (CSGN.VX) trader pleaded not guilty on Friday to charges of inflating the prices of subprime mortgage-backed bonds to the tune of $540 million.

Kareem Serageldin, who was extradited to the U.S. by British officials this year, entered his plea at an arraignment in Manhattan federal court, a spokeswoman for the Manhattan U.S. Attorney's office said on Friday evening.

Serageldin, 39, is slated to appear in court again next Friday before Judge Alvin Hellerstein, spokeswoman Julie Bolcer said.

The Swiss bank's former global head of structured credit is accused of artificially inflating the prices of mortgage-backed bonds between August 2007 and February 2008, when the U.S. subprime housing market was collapsing and the bonds were losing value at an alarming rate.

A lawyer for Serageldin could not immediately be reached for comment.

According to the U.S. indictment against him, Serageldin devised the scheme to "enhance his apparent job performance" because he wanted a larger bonus and he knew he was in line for a big promotion.

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