UK Trader Pleads Guilty To Hiding Subprime Losses

David Higgs pleaded guilty in a New York court to overstating the value of mortgage-baked bonds when working at Credit Suisse at the start of the financial crisis.

The ex-Credit Suisse trader admitted conspiring to falsify records in a multi-billion dollar account and the US prosecutors allege that Higgs began overstating the value of mortgage-backed bonds between August 2007 and February 2008 as they actual value began to decline. 

The prosecutors claim Mr Higgs attempted to exaggerate the bond's value in order to qualify for a bonus at the end of 2007. He could face up to five years in prison as well as fine.

In spring 2008 Credit Suisse was forced to take $2.65bn off its trading books, with $540m coming form the trading book that Mr Higgs is alleged to have inflated. 

A second trader Salmaan Siddiqui, who worked for Mr Higgs, has also pleaded guilty. A number of Credit Suisse employees have been charged with misstating valuations on the bank's mortgage-backed securities and are first traders in the USA to face criminal prosecution for problems in the mortgage leading up to the credit crisis.

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