Kareem Serageldin, the ex-global head of Credit Suisse Group AG (CSGN)'s structured credit trading business, was sentenced to 2 1/2 years in prison for his part in a scheme to falsify the value of mortgage-backed bonds in 2007.

U.S. District Judge Alvin Hellerstein, who presided over the case, also ordered Serageldin to pay a $150,000 fine. Serageldin pleaded guilty in April to a single count of conspiracy to falsify Credit Suisse's books and records, which carried a maximum prison sentence of five years.

Serageldin said today that when he discovered subordinates falsifying the value of mortgage-backed bonds in late 2007, he joined the scheme rather than stop it. Serageldin said he sought to preserve his reputation in the bank at a time when there was great financial turmoil in the marketplace.

"I see I failed miserably in the decisions I made," said Serageldin, whose lawyers had sought a term of probation for him.

Prosecutors claimed Serageldin marked up the collateralized debt obligations to meet targets and boost year-end bonuses for his $5.35 billion trading book, which was known as "ABN1," at a time when the U.S. housing market was plummeting. After the scheme was discovered, Credit Suisse, based in Zurich, took a $2.65 billion write-down, according to the government. About $540 million of the write-down was due to the ABN1 securities, according to the government.

The case is U.S. v. Serageldin, 12-00090, U.S. District Court, Southern District of New York (Manhattan).

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