LONDON – Former Credit Suisse trader Kareem Serageldin expects to reach a plea agreement with the U.S. government over allegations of a $3 billion fraud involving subprime mortgage bonds, a British court heard on Wednesday.
He is the most senior banker charged in a scandal dating back to 2007, in which mortgage-backed securities traders were caught trying to cover up losses on their books, prosecutors say.
Serageldin, 39, appeared at Westminster Magistrates' Court for a short hearing as part of extradition proceedings. The case was adjourned until January 14 next year.
The U.S. has been seeking his extradition since his arrest in Britain two months ago.
The Egyptian-born Serageldin, former global head of structure credit trading for Credit Suisse, spoke only to confirm his age and name in court on Wednesday. He is free on bail pending the outcome of the extradition process.
His lawyer Ben Brandon told the court that Serageldin was in negotiations with the U.S. Department of Justice towards an eventual plea.
"The expectation is that the discussions will be fruitful," Brandon said. "I am able to say that a final reply is awaited."
Brandon suggested that if the response from Washington was as hoped and expected, the extradition proceedings would no longer be necessary.
The court will hear an update on the negotiations at the January hearing.
Two other Credit Suisse employees pleaded guilty in a U.S. federal court in February to criminal charges of conspiracy to commit wire fraud and falsify books and records, making it the first successful U.S. prosecution of employees of a major bank involved in the subprime meltdown of 2007-08.
(Reporting by Estelle Shirbon; Editing by Tom Pfeiffer)