« "High Court May Clarify Rule on Impairment and Death Penalty" | Main | Corrupt Massachusetts lab analyst gets (significant? inadequate?) state prison term for misdeeds »

November 23, 2013

Another notable white-collar defendant gets another below-guideline federal sentence

This New York Times article, headlined "Ex-Credit Suisse Executive Sentenced in Mortgage Bond Case," reports on a notable federal sentenced handed down yesterday:

A former top executive at the Credit Suisse Group was sentenced to two and a half years in prison on Friday for inflating the value of mortgage bonds as the housing market collapsed. The prison term makes the executive, Kareem Serageldin, one of the most senior Wall Street officials to serve time for criminal conduct during the financial crisis.

Wearing a dark suit and blue tie, Mr. Serageldin remained stoic as Judge Alvin K. Hellerstein of the United States District Court in Manhattan handed down the sentence, which was less than the roughly five-year sentence called for by nonbinding sentencing guidelines. Judge Hellerstein showed mercy on Mr. Serageldin in part because of what he said was a toxic culture at Credit Suisse and its rivals.

“He was in a place where there was a climate for him to do what he did,” the judge said. “It was a small piece of an overall evil climate inside that bank and many other banks.”

A spokesman for Credit Suisse disagreed with the judge’s remarks, noting that when regulators decided not to charge the bank in connection with Mr. Serageldin’s actions, they highlighted the isolated nature of the wrongdoing, the bank’s immediate self-reporting to the government and the prompt correction of its results.

Mr. Serageldin, 40, led a group at Credit Suisse that traded in mortgage-backed securities. As the housing market soared, his group made hundreds of millions of dollars for the bank by pooling mortgage assets, slicing them up and selling the pieces to investors. Many of those were subprime loans that went to shaky borrowers, however, and banks found themselves holding billions of dollars in sour mortgages when the market collapsed.

Federal authorities began their investigation into Credit Suisse in 2008 after the bank disclosed that Mr. Serageldin’s team had mismarked its mortgage portfolio. The bank suspended the team and cooperated with authorities. Two other traders in that group, David Higgs and Salmaan Siddiqui, were also charged alongside Mr. Serageldin. They all pleaded guilty; Mr. Higgs and Mr. Siddiqui have yet to be sentenced....

“This is the worst day of my life,” Mr. Serageldin told the judge. “I am terribly sorry for what I have done.”

In an unusual moment during the hearing, Judge Hellerstein allowed Mr. Serageldin’s mother to speak about her son. Holding back tears, she told the judge her son had always worked hard to make the family proud. “Please see him in the context of his whole life history,” she told the judge, who commiserated with Ms. Serageldin by telling her that he, too, was the child of immigrants. “Whatever sentence he serves, I will serve.”

The judge asked Mr. Serageldin’s lawyer to explain his client’s misconduct. “This is a deepening mystery in my work,” the judge said. “Why do so many good people do bad things?” Sean Casey, a lawyer at Kobre & Kim, said that Mr. Serageldin was under great pressure during the credit crisis and made a big mistake when confronted with failure for the first time.

Judge Hellerstein said that his sentence was necessary to deter misconduct on Wall Street. “Each person has to look within himself and ask himself what is right, what is wrong,” the judge said. “Even in the worst of times, what is right cannot be sacrificed.”

November 23, 2013 at 06:30 PM | Permalink


TrackBack URL for this entry:

Listed below are links to weblogs that reference Another notable white-collar defendant gets another below-guideline federal sentence:


What a hyporite. What an a-hole.

"The judge asked Mr. Serageldin’s lawyer to explain his client’s misconduct. “This is a deepening mystery in my work,” the judge said. “Why do so many good people do bad things?”

Lawyer traitors to the country enacted a homosexual written law totally terrorizing business. Then black thug lawyers in the government threatened the charters of any bank not lending to irresponsible minorities in the ghetto, where only criminals want to live to pursue their lifestyle choices undisturbed by the police.

Then the government requires self-reporting by banks. This the same as the Inquisitor's confession for redemption, prior to the stake. It is the same as Stalin's self criticism. Journalist criticized their Communist purity and were shot.

This case is a prosecution of sharp but totally valid business practice. The interest rate on these mortgage securities was much higher, implying a higher risk to sharp business bankers in Europe. Less risky and lower paying investments became below the standard of due care. Anyone buying them was criticized as missing the opportunity everyone else was taking.

How about this new duty of business. Total resistance, and attacking the internal traitor lawyer enemy. Do total e-discovery on the personal and work computers of the vile feminist lawyer enemy. Then file ethics charges for every inappropriate utterance, including all hate filled discriminatory statements. Start a campaign to shun the feminist in his own neighborhood, by all serve and product providers, including doctors. Let the enemy get care 50 miles away.

This is the person who should go to jail, but has not. Underwriters are gathered in a huge hotel hall. The underwriters says, this mortgage for a minority is not qualified. The roving supervisor says, sign it or get fired. The supervisor should go to jail, and get water boarded to name who made his policy. The defendants should then sue the government regulators that forced them to be dishonest. All immunities of Congress and the judiciary should end. Then the people who wrote these laws and voted for them should be arrested for treason, tried for an hour, and immediately executed upon conviction. To deter damages to the nation of this magnitude.

Posted by: Supremacy Claus | Nov 24, 2013 1:12:21 PM

Valuation of a house is an opinion. It is immunized by the Free Speech Clause. In the absence of force, greed propelled the buyers of the securities. One is allowed to tempt people by appealing to their greed.

Compare to the conduct of the government. Nothing it does has external validation. All its self-dealing immunities and rent seeking are validated solely at the point of a gun.

Posted by: Supremacy Claus | Nov 24, 2013 1:18:35 PM

"Judge Hellerstein said that his sentence was necessary to deter misconduct on Wall Street."

General deterrence violates Fifth Amendment procedural due process right to a fair trial. One may not punish a person to send a message to people he has never met, and who have not yeat committed a crime.

Why no defense or appellate lawyer has used this self-evident point as reversible error shows the defense is not really working for the client.

The remark should prompt a request for recusal because of the anti-business bias of the judge.

The judge is also 80 years old. The defense should demand a mental exam of the judge after any adverse ruling.
Halt the trial until the judge has proven his mental ability is not in the demented range.

The judge attended an Ivy League law school. He should have to prove he is not biased in favor of larger government. Ivy League education is left wing indoctrination. Graduation proves it was successful. The Ivy league schools, all of them, receive massive government subsidies. In return for $billions in bribes, they teach people to enlarge government. These grants are really bribes because their official purposes are all worthless to the public, th eultimate in rent seeking (an euphemism for armed robbery).

Posted by: Supremacy Claus | Nov 24, 2013 1:30:42 PM

Post a comment

In the body of your email, please indicate if you are a professor, student, prosecutor, defense attorney, etc. so I can gain a sense of who is reading my blog. Thank you, DAB