Editor’s Comment: So SOMEONE is going to jail for up to five years. But the meat of this lies between the lines.First, it was a conspiracy charge. You can’t run a PONZI scheme the size of the Madoff scheme without channels that are sending “marks” to you to “invest.” The securitization scam is several hundred times the size of the Madoff scam, and that means there were literally thousands of traders and managers who knew that they were acting improperly — illegally, that is.Second, Higgs told a Federal Judge that his criminal behavior consisted of manipulation and inflation of the cash bond position markings in his tradings book (called ABNI), in order to hide the losses. Most people will never know what that means. It simply means that the trades were kept out of the system where losses would be easily apparent.There are numerous reports that the book was kept literally in pencil on paper, so they could change the contents or destroy the book if that became necessary. This is why tracking the the actual money trail becomes challenging but it can be done through what one of our senior analysts calls “reverse engineering. IN other words, take the money going into the system and see where it went or where the trail ends. This will give you sufficient clues to determine whether payments in part or in whole were made to REMICS upon whose behalf foreclosures are being filed. In most cases, the figures are wrong, the debt to the investor has been paid in whole or in part, and there is no default. That is why we do the loan level accounting for those readers who are willing to fight about it.Sadly, this guy seems like the fall guy for what was ordered by his managers. HIs statement that he fooled Credit Suisse management rings hollow when you compare the facts and the the history of the business. It simply isn’t possible for these events to occur without senior management knowing what was going on. Their mantra is plausible deniability. Soon you will see other people, like Higgs, who “flip” and testify against the large Banks upon which they depended for employment at rates of compensation that were too high — unless you factor in the hush money.
Ex-Credit Suisse manager pleads guilty in subprime probe
(Reuters) – A former London-based Credit Suisse trader pleaded guilty to a criminal conspiracy charge on Wednesday, and he is cooperating with a U.S. government investigation on writedowns of subprime mortgage derivatives at the height of the financial crisis.
David Higgs told a federal judge in New York that while he was a managing director in the investment banking division of Credit Suisse in 2007 and 2008, he and others manipulated and inflated the cash bond position markings of a trading book, called ABNI, in order to hide losses.
“As a result of my actions, senior management of Credit Suisse was given the false impression that the ABNI book was profitable and caused Credit Suisse to report false year-end numbers for 2007 in their books and records,” Higgs said in court. “I did this because I wanted to remain in good favor with my boss, Kareem Seregeldin, and enhance my job performance.”
Higgs said Seregeldin and others he did not identify had known about the manipulation and assisted in it.
Higgs faces a maximum possible prison sentence of up to 5 years on the charge of conspiracy to commit falsification of books and records and to commit wire fraud. He was released on a $500,000 bond and will be allowed to return to his home in Britain while the investigation continues.
(Reporting By Grant McCool; Editing by Lisa Von Ahn)
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: | ABNI, bankruptcy, borrower, countrywide, Credit Suisse, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, Higgs, LOAN MODIFICATION, modification, mortgage bonds, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND