Kareem Serageldin, the ex-global head of Credit Suisse's CDO business charged in a bonus-boosting fraud tied to a $5.35bn trading book, was arrested by London police as he was negotiating his surrender to U.S. authorities.
Bloomberg reports that Serageldin, a U.S. citizen who lives in England, was charged in February with masterminding a scheme to fake collateralized debt obligations. He was taken into custody Wednesday outside the U.S. consulate, another person with knowledge of the matter said. Both spoke on condition of anonymity because the arrest isn’t public.
Reuters reports that prosecutors have said that Serageldin was the most senior banker charged in a scandal dating back to 2007, in which mortgage-backed securities traders were caught trying to cover up $540m in losses on their books.
The Financial Times says that Serageldin was paid a bonus of more than $1.7m in 2007 and received a $5.2m incentive award, which was later rescinded. The others also received bonuses.
Finally, Bloomberg reports that Serageldin’s lawyer told a London court today that his client’s arrest outside the U.S. Embassy was a result of 'miscommunication'. Ben Brandon said Serageldin was negotiating a plea bargain with U.S. prosecutors before the arrest.
Serageldin won’t consent to extradition to the U.S. until he reaches a plea deal.
Credit Suisse hasn't been charged with any wrongdoing in connection with this case.