Increase Credit Score Secrets ~ Raise My Credit Score Fast

Hire Hopes for Job Seekers With Dodgy Credit?

admin — Fri, 03 Feb 2012 23:23:33 +0000

With the nation’s unemployment remaining stubbornly high, a number of states are taking a step to help job seekers: banning credit checks.

This month, California became the seventh state to prohibit companies from doing credit checks on many applicants, and similar bills are pending in another 19 states. On the federal level, a bill that calls for a similar ban is awaiting review by a House subcommittee. The moves could be “a game changer for people negatively affected by this economy,” says Persis Yu, staff attorney at the National Consumer Law Center.

The trend also has ramifications for employers, who for years have been permitted to review the credit histories of prospective workers. The assumption, experts say, is that a bad credit report might help flag poor work habits and decision-making, and even general untrustworthiness.

Indeed, some 60% of employers report doing credit checks for some or all job candidates, according to the Society for Human Resource Management. Of those, more than 60% said they are unlikely to accept an applicant with an outstanding judgment currently filed against them, while nearly half would likely pass on one with accounts in debt collection.

Some research seems to back employers’ fears: Nearly one third of employees with self-reported credit problems engaged in “counterproductive work behavior,” such as theft or accepting bribes, compared to about 18% of employees without financial problems, according to a 2008 academic study.

But consumer advocates say credit problems are more widespread now because of the struggling economy. Over the past two years, for instance, roughly 4.8 million homeowners have received a foreclosure notice, according to RealtyTrac.com. A foreclosure stays on a consumer’s credit report for seven years.

Given that backdrop, some argue that employers should hire based on skills and qualifications and not credit histories. Those in the job market “have plenty of obstacles right now and should not have to try to defend the fact that they missed payments on bills,” says Diane Rosenbaum, an Oregon state senator whose bill banning certain credit checks became law in 2010.

Case in point: Karen Selling, a dietetic technician, says she and her husband, Christopher, a diesel mechanic, of Shelton, Conn., have been on dozens of interviews over the past two years, but neither has been hired because of their credit histories. When their son got sick a few years ago, the Sellings racked up medical debt and fell behind on their mortgage. “Nobody is giving us a chance,” she says.

In many states with the new laws, employers can still check the reports of applicants for certain white-collar jobs, such as bankers and law-enforcement positions.

Under the Fair Credit Reporting Act, companies must get permission from applicants in writing to check their credit reports. For those with credit problems, it is better to explain what happened rather than deny permission, says John Ulzheimer, president of consumer education at SmartCredit.com, a credit-monitoring site.

Article source: http://www.smartmoney.com/plan/careers/hire-hopes-for-job-seekers-with-dodgy-credit-1328036148030/?mod=1122

Romney Says Obama Doesn’t Deserve Credit for Jobs Growth Report

admin — Fri, 03 Feb 2012 23:23:32 +0000

February 03, 2012, 5:42 PM EST

By John McCormick and Amanda J. Crawford

(Updates with Gingrich comments starting in sixth paragraph. For more 2012 campaign news, see ELECT.)

Feb. 3 (Bloomberg) — Mitt Romney said President Barack Obama doesn’t deserve credit for improvement in the economy, saying the man he’s seeking to replace in November has stymied U.S. growth.

“This president has not helped the process; he’s hurt it,” the front-runner for the Republican presidential nomination told 14 local businessmen he met today with in Sparks, Nevada. “If I’m the president, I will see what you do as being a very good thing, a patriotic and good thing.”

In a report announced today, the U.S. jobless rate fell in January to the lowest in three years as payrolls climbed more than forecast. The unemployment rate dropped to 8.3 percent, the lowest since February 2009. The 243,000 increase in jobs is the biggest in nine months and exceeded all forecasts in a Bloomberg News survey.

Romney, campaigning a day before Nevada holds caucuses that polls suggest he will easily win, called the numbers “good news” before targeting Obama for criticism.

The economy “has taken a lot longer than it should have to come back, in part because of the policies of this administration,” Romney said. “For that, the president deserves the blame that he’ll receive in this campaign.”

Pipeline Issue

Former U.S. House Speaker Newt Gingrich, Romney’s leading rival in the Republican race, also criticized Obama as an impediment to an economic rebound. At a rally in Las Vegas, he cited as an example the president’s rejection earlier this month of a permit for TransCanada Corp.’s Keystone XL pipeline.

In an interview on CNN, Gingrich said of Obama that if the economy “gets better and better and better between now and the election, he will get some credit. On the other hand, if this is a lull before it starts getting worse, his re-election will be in enormous trouble.”

Obama, in remarks today in the Washington suburb of Arlington, Virginia, said the jobs data show “the economy is growing stronger,” and the recovery “is speeding up.”

Nevada, which Obama won in the 2008 presidential election, is seen by political analysts as a battleground in this year’s general election. The president visited Las Vegas last week as part of a campaign-like tour after his Jan. 24 State of the Union address.

Nevada’s Unemployment

The state had the nation’s highest unemployment rate, 12.6 percent, in December. For the fifth straight year, Nevada also had the highest rate of home foreclosure filings in 2011, according to RealtyTrac Inc., a data seller in Irvine, California.

Romney said Obama has focused on promoting partisan measures as president, pushing through “a number of pieces of legislation that his base voters wanted that frankly made it very hard for enterprises to recover.”

He also said banks have slowed their lending out of concern over increased federal regulation.

“They’ve become less flexible and not more flexible at a time when they should be more flexible,” he said.

Speaking later to several hundred people at a rally inside an airport hangar in Elko, Nevada, Romney charged that Obama has “failed the American people.”

Fred Weeks, 67, a geography and government teacher from Spring Creek, Nevada, said it impressed him that Romney visited the state’s sparsely populated northeast corner.

“It shows he cares,” Weeks said. “We’ve got to get Obama out of office and Romney probably has the best chance.”

Gingrich, at his Las Vegas event, shifted his criticism between Obama and Romney.

Wage Issue

He assailed a Romney proposal to tie minimum wage increases to inflation, saying the plan would exacerbate unemployment among young people and hurt small businesses. Romney doesn’t understand the free market, Gingrich said, or that small businesses drive the economy.

“My theory of life is simple: We want you to get a job, then we want you to get a better job and someday we want you to own the job,” he told the crowd at a bar where sawdust covers much of the floor.

Gingrich said he would cut taxes and regulations, while developing American energy — the opposite of what he said Obama has done. “He is sort of the anti-jobs presidency,” he said.

Gingrich also sought to turn a negative into a positive on a topic that has hurt his presidential ambitions: his consulting work after leaving Congress for the government-backed mortgage company Freddie Mac.

“We did not create Fannie Mae and Freddie Mac so that rich guys like Mitt Romney and Goldman Sachs could make money,” Gingrich said to cheers from the crowd. “We created them to provide low-cost housing to the American people and their current behavior is a betrayal of the very purpose of founding them and Congress should be investigating them right now.”

–Editors: Don Frederick, Jim Rubin.

To contact the reporters on this story: John McCormick in Elko, Nevada, at jmccormick16@bloomberg.net; Amanda J. Crawford in Las Vegas at acrawford24@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net

Article source: http://www.businessweek.com/news/2012-02-03/romney-says-obama-doesn-t-deserve-credit-for-jobs-growth-report.html

4 Common Credit Card Misconceptions

admin — Fri, 03 Feb 2012 23:23:31 +0000

What is the downside of applying for a credit card with a great sign up bonus? Not much. In fact, opening a single new account will actually improve your credit score in most cases. This is one of several popular misunderstandings about how credit cards work.

I Pay My Balance in Full, So I Don’t Have Any Debt
The smartest way to use a credit card has always been to pay your balance in full every month in order to avoid paying interest. From a practical standpoint, the cardholder isn’t incurring any debt, but that is not how the credit agencies will report it. Each bank will report your current balance as debt, even before you have received your statement. In the event that your balance is reported the day after you have paid your statement in full, the bank will still report as debt all of the charges made since your last statement period ended. So long as this amount reported isn’t an unusually large percentage of your available credit, your credit score should not be affected. Otherwise, cardholders who are applying for a new mortgage may wish to pay their balances down before their due date.

Applying for a New Credit Card Will Hurt Your Credit Score
When you apply for and receive a new credit card, two things happen that affect your credit score. First, there is a request made for your credit history called a “pull.” One pull every now and then has a negligible effect on your credit, but too many pulls in a short period of time give the impression that you are facing financial difficulty. Additionally, being granted additional credit will lower your credit utilization ratio, so long as you do not incur additional debt. Since a lower ratio will actually help your credit score, many card holders report that their credit score actually increases slightly when they receive a new card, but don’t add to their debt.

Canceling Your Credit Cards Will Help Your Credit
Americans get in trouble with credit card debt all too easily. In response, many of them will cancel their cards with the hope of rehabilitating their credit history. This works, but only as a last resort to keep you from incurring more debt. Unfortunately, the simple act of closing your account will hurt your credit score for the same reasons that opening a new account can help. Reducing your available credit without reducing your debt increases your credit utilization ratio, which hurts your score. For some, the solution may be to keep their accounts open and simply cut their cards in half so they can’t be used. Of course, a replacement card is just a phone call away.

It’s Against the Law for a Merchant to Add a Credit Card Surcharge
Retailers are not supposed to tack on a fee for you to use your credit card, but the law has little to do with it in most states. In the United States, merchants enter into agreements with credit card processors that prohibit such surcharges (Although some foreign merchants are not bound by these contracts). Nevertheless, you have probably found that some merchants insist on charging such fees despite their agreements. Retailers have lobbied Congress to pass laws prohibiting such agreements, but for now, merchants must still sign them in order to accept credit cards. When faced with these surcharges, your only recourse is to notify the credit card networks that one of their merchants is violating its agreement with them.

The Bottom Line
Credit cards are used widely, but there is a lot of misinformation going around about them. By understanding the facts, you can make the best decisions about your use of these powerful financial instruments.

More From Investopedia

6 Benefits Of Increasing Your Credit Limit

Saving Vs. Paying Off Debt

How To Spend Valentine’s Day On A Budget

Article source: http://finance.yahoo.com/news/4-common-credit-card-misconceptions-165009702.html

Fitch Publishes 'U.S. Credit Card ABS Tear Sheet' with December 2011 Performance Data

admin — Fri, 03 Feb 2012 11:20:14 +0000

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings has published its monthly ‘U.S. Credit Card ABS Tear
Sheet’. This report shows Fitch’s break-even stress scenarios for the
largest credit card issuers using December 2011 performance data. The
break-even runs are based on the 12- and three-month average performance
for each trust, using the current one-month LIBOR rate for the LIBOR
assumption. It allows investors to compare trust performance with the
same baseline.

This report also contains the following: a) Credit Card Performance
Metrics Summary for Prime Portfolio; b) Issuance Ratings Summary; c)
Issuance Trust Credit Enhancement Summary; d) Issuance Trust Enhancement
Summary; e) Issuance Trust Comparison data; f) Credit Enhancement
Changes history summary, and g) Break-even Multiples comparison summary.

‘U.S. Credit Card ABS Tear Sheet’ is available on the Fitch Ratings web
site at ‘www.fitchratings.com‘
under the following headers:

Structured Finance ABS Special Report

Additional information is available at ‘www.fitchratings.com‘.

Applicable Criteria and Related Research:

–’Global Credit Card ABS Rating Criteria’ (June 28, 2011);

–’Credit Cards: Asset Quality Review 1Q11′ (May 6, 2011);

–’U.S. Credit Card ABS Ratings and Structures Withstand Persistent
Pressures’ Aug. 24, 2010);

–’Credit Card Movers Shakers’ (Dec. 1, 2011);

–’U.S. Credit Card ABS through the Crisis’ (Jan. 20, 2010).

Applicable Criteria and Related Research: U.S. Credit Card ABS Tear Sheet

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=666230

Global Credit Card ABS Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=639672

Credit Cards: Asset Quality Review 1Q11

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=626709

U.S. Credit Card ABS Ratings and Structures Withstand Persistent
Pressures

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=548649

Credit Card Movers Shakers (U.S.)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=658691

U.S. Credit Card ABS Through the Crisis – “A Look Back at What Could
Have Been…”

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=496192

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND
DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.
IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE
AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS
OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES
AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF
THIS SITE.

Article source: http://finance.yahoo.com/news/fitch-publishes-u-credit-card-180200017.html

6 Benefits Of Increasing Your Credit Limit

admin — Fri, 03 Feb 2012 05:19:17 +0000

Increasing your credit limit just means giving yourself the opportunity to spend beyond your means, right? Not necessarily. Increasing your credit limit can have a number of upsides if you manage your credit wisely.

Lowers Your Credit Utilization and Increases Your Credit Score
The FICO credit scoring model will ding your credit score if the amount of credit you’ve used is close to the total amount of credit available to you. That’s because it considers you to be at risk of maxing out your cards and having trouble making future payments. You might know that these risks don’t actually apply to you, but that’s how the scoring model works.

If you have a $2,000 credit limit and you regularly end up with a monthly bill of around $1,800, you’re using 90% of your available credit. Raising your credit limit will reduce that percentage and should improve your credit score.

Cheaper and Easier to Get Loans and Additional Credit
When you’re not using nearly all of your available credit, you appear to be financially responsible to the credit bureaus and your credit score should increase. If your credit score is higher, you will have a better chance of getting approved for a credit card, car loan or mortgage in the future. You’ll also have a better chance of getting a lower interest rate, since your credit score determines whether you’ll be offered the best available rate or a higher, risk-adjusted rate.

Helps in an Emergency
Having a credit limit well in excess of your usual spending amount gives you a resource if you have a genuine emergency that you can’t pay for with cash. Say you’re traveling and you need to change your plans and return back home immediately – it probably won’t be cheap to change your plane ticket, and it’s easier to pay for a plane ticket with a credit card.

Increases Your Rewards
If you consistently pay off your balance in full and on time but you’re not putting all of your expenses on your credit card, it might be time to start. Having a higher credit limit can help you do that. The conventional wisdom says that you shouldn’t charge everyday expenses like groceries and gas to your credit card, but that advice only applies if you’re carrying a balance – it’s designed to help you avoid making a bad problem worse.

If you never carry a credit card balance, paying for recurring expenses on your credit cards won’t cost you anything and can help you earn more rewards. Those rewards can actually reduce your spending in other areas by helping you pay for vacations, gifts, clothes and nights out.

Lets You Make Large Purchases Efficiently
You already know that using your credit card to pay for large purchases is convenient and can help you rack up rewards. What you might not know is that your credit card likely includes a number of consumer protections that can come to your rescue if there is a problem with your purchase. For example, MasterCard’s protections include extended warranties, price protection and coverage for damaged or stolen items. American Express offers similar benefits. Check your credit card agreement to see what protections apply to your cards.

Helps You Avoid Credit Score Dings
One way to get access to more credit is to get another credit card, but increasing your limit on an existing card might be a better option. According to FICO, opening a new credit card can ding your score. When you open a new account, it shortens the length of your credit history, and a longer history often means a better score. The age of your oldest account, the age of your newest account and the average age of all your accounts are factored into the length of your credit history, and this metric affects around 15% of your score.

The Bottom Line
If you know you’re likely to spend up to your credit limit no matter how high it is, that major drawback will outweigh these benefits of increasing your credit limit. Otherwise, consider requesting an increase. It’s usually as simple as sending an email to customer service.

More From Investopedia

Saving Vs. Paying Off Debt

How Your Credit Score Will Affect Your Mortgage Rate

The Impact Of Your Starting Age On Social Security

Article source: http://finance.yahoo.com/news/6-benefits-increasing-credit-limit-170807749.html

Rate survey: Credit card rates hit lowest levels in 5 months

admin — Thu, 02 Feb 2012 23:18:52 +0000

Jobs Preview: Time to Buy Stocks?Breakout
It’s arguably the most important economic data point of them all right now as anxious investors look for more evidence …

Article source: http://finance.yahoo.com/news/rate-survey-credit-card-rates-173000576.html

Biz Beat: Report: Homestead Tax Credit cuts hit seniors hardest

admin — Thu, 02 Feb 2012 23:18:50 +0000

Seniors living in their own homes will absorb the biggest
financial hit under GOP-backed changes to the state’s Homestead Tax
Credit, says
a new report from a statewide advocacy group.

The Homestead Credit is designed to reduce property taxes for
low-income homeowners and tenants who pay taxes indirectly through
their rent. Nearly a third of recipients are over age 65 and more
than half have incomes under $15,000, according to the Wisconsin Department
of Revenue.

In 2009, the Doyle administration increased the tax credit and
indexed the eligibility ceiling to the inflation rate. Prior to
that, the eligibility formula had been frozen for a decade.

Last year, however, Gov. Scott Walker and the Legislature
reversed that decision, freezing the credit at its current level.
That move was projected to save the state $14 million over the next
two years.

As a result, a senior living on Social Security will now see
their tax credit drop by $209, or 28 percent, over the next five
years, according to an analysis by the Wisconsin Budget
Project, an initiative of the Wisconsin Council on Children and
Families. The full report
is available here.

Other seniors will lose the tax credit altogether, the group
warns, because their Social Security income will increase while the
level for the Homestead Credit eligibility stays frozen. That could
push many recipients out of the program entirely.

“This is money that will come out of seniors’ pockets,” said
Budget Project research analyst Tamarine Cornelius in a statement.
“The effect will be relatively small at first but will continue to
snowball.”

The Budget Project estimates the Homestead Credit by 2016 will
cover only 16 percent of a Wisconsin senior’s property taxes.
That’s down from 25 percent in 2011.

Twenty years ago, the Homestead Credit would have covered nearly
60 percent of that same person’s property tax bill, the report
says.

Nino Amato, president of the Coalition of Wisconsin Aging
Groups, also rapped the Legislature for cutting programs that
benefit seniors while finding enough money to reduce taxes for
businesses and upper-income taxpayers.

The Legislature budgeted $131 million for the Homestead Credit
in 2012 and $129 million in 2013, while approving $210 million in
tax cuts over the same period, the report notes.

“The Legislature chose to protect the wealthiest Wisconsin
households, and at the same time raise taxes on people who struggle
to make ends meet,” says Amato in a statement. “It adds to the
growing divide between those struggling households and the
wealthiest Wisconsinites.”

Article source: http://host.madison.com/ct/business/biz_beat/biz-beat-report-homestead-tax-credit-cuts-hit-seniors-hardest/article_ff6d903e-4d20-11e1-b590-0019bb2963f4.html

Fitch Publishes U.S. CMBS Focus Report on Credit Suisse Commercial Mortgage Trust, Series 2007-C5

admin — Thu, 02 Feb 2012 23:18:49 +0000

Jobs Preview: Time to Buy Stocks?Breakout
It’s arguably the most important economic data point of them all right now as anxious investors look for more evidence …

Article source: http://finance.yahoo.com/news/fitch-publishes-u-cmbs-focus-193600308.html

Credit Card Holder Wallet – The Newest Need To Have Men’s Accessory

Author — Thu, 02 Feb 2012 19:47:25 +0000

A wallet is so a lot more than one thing that holds funds; it is an extension of someone’s personality and reflects a sense of confidence and sophistication. A wallet is undoubtedly essential in the course of some large occasions. The fashionable man knows every little thing has a place and the wallet is often overlooked.

But have you ever noticed in the constant enlarging inside your pocket? Certainly it is due to the cards. Credit cards, bank cards, enterprise cards, as the list goes on, your pants grow bigger.

The most recent trend to solve the “problem” may be the credit card holder wallet. Fashion critics hailing it as the most have men’s accessory for 2010 fashion season. These wallets are like regular wallets but unique in holding cards as well as other essential ID. They are great for carrying cards and receipts. Crafted in genuine leather, these wallets come in lots of classy colors like black, browns, cream and white.

Investing a bit a lot more into getting a genuine good high quality leather credit card holder wallet ensures which you are ideal in your life. You are able to anticipate this fashion accessory to give you an extra touch of sophistication. Whether or not you preserve your credit card holder wallet in your briefcase or inside your suit jacket, you will be able to avoid significantly in the headache of losing ones individual items. Having continued to be the fashion need to have across the Europe, the credit card holder wallet is set to take the American landscape by storm.

Whenever you come across the social situations like closing company offers more than lunch or your romantic date dinner, the credit card holder wallet will allow you to carry oneself in such a manner and give your other individuals the impression of what your individual signification holds. It is the time to alter you wallet now!

We have all the Best credit card wallet on our site with Real Consumer Feedback. We also reveal where to purchase credit card organizer wallet as cheap as possible!

Ex-Credit Suisse Traders Plead Guilty to CDO Bonus-Scheme

admin — Thu, 02 Feb 2012 11:18:23 +0000

February 02, 2012, 5:17 AM EST

By Patricia Hurtado and Bob Van Voris

Feb. 2 (Bloomberg) — Kareem Serageldin, Credit Suisse Group AG’s former global head of structured credit trading, was charged in a scheme to falsify prices tied to collateralized debt obligations to meet targets and boost year-end bonuses for his $5.35 billion trading book.

Serageldin, 38, who lives in the U.K. and led the securities department of Credit Suisse’s investment banking division, was named in an indictment unsealed yesterday in New York. Two of his former subordinates, David Higgs, 42, and Salmaan Siddiqui, 36, pleaded guilty in federal court in New York yesterday and said they’re cooperating with the U.S. in the probe.

Higgs and Siddiqui said during their guilty pleas that Serageldin told them to overstate the value of mortgage-backed assets in a Credit Suisse trading book known as ABN1 after the collapse of the U.S. housing market. Both said they did so to enhance their job performance and bonuses.

“While the residential housing market was in a freefall, these defendants decided they were above the rules of the market and above the law,” Manhattan U.S. Attorney Preet Bharara told reporters yesterday.

Switzerland’s second-largest bank said in 2008 it would take writedowns on asset-backed securities after finding “mismarkings” by a group of traders. The Zurich-based bank said it would write down $2.65 billion after a review found pricing errors on residential mortgage-backed bonds and CDOs made “by a small number” of traders who were subsequently fired or suspended.

‘Victims’

John C. Coffee Jr., a Columbia Law School professor, said the charges differ from the civil lawsuits in which banks are accused of lying about the risks of mortgage-backed securities sold to investors.

“Credit Suisse could say they were the victims of this crime,” Coffee said. “That’s fairly unusual.”

The U.S. Securities and Exchange Commission yesterday sued Serageldin, Higgs, Siddiqui and Faisal Siddiqui. The SEC identified Faisal Siddiqui, 36, of New York, as a vice president at Credit Suisse’s CDO trading group in New York. The SEC said that Salmaan Siddiqui and Faisal Siddiqui aren’t related.

“The defendants’ overvaluation of mortgage-backed securities benefitted them in the short run, and contributed to Credit Suisse incurring a two billion-dollar-plus write down when discovered,” Janice Fedarcyk, head of the FBI’s New York office, said yesterday at a press conference.

“While the housing market was collapsing, the defendants profited, not by correctly predicting the trend, but by cooking the books,” she said.

Rescinded Pay

Serageldin earned $7.27 million in salary and other compensation in 2007, the U.S. said. Once Credit Suisse learned of the scheme, they rescinded more than $5.2 million of the incentive pay he received, prosecutors said.

Serageldin, a U.S. citizen living in the U.K., isn’t in U.S. custody, Bharara said.

“We do not consider him a fugitive,” Bharara said. “We encourage him and his lawyer to come to the United States and answer the charges against him.”

If Serageldin doesn’t come to New York, Bharara said his office will seek to extradite him.

“As we do in every case, when we charge people who are not in the United States, we work with the relevant authorities in that country to make sure we bring them here to face trial,” Bharara said.

PL Objectives

Higgs and Salmaan Siddiqui said they participated in the manipulation scheme at Serageldin’s direction to meet targets and increase their compensation. The bank said yesterday that the three were fired in 2008.

“I, with the agreement and assistance of Kareem Serageldin and others, manipulated and inflated the cash bond position markings of a trading book referred to as ABN1, in order to hide losses in this book and to achieve specific daily and month-end profit and loss objectives,” Higgs told U.S. District Judge Alison Nathan.

“As a result of my actions, senior management of Credit Suisse was given the false impression that the ABN1 book was profitable and caused Credit Suisse to report false year-end numbers for 2007 in their books and records,” he said.

Higgs, who said in court that he worked as a managing director in the investment banking division at Credit Suisse in London, told the judge he participated in the scheme, “because I wanted to remain in good favor with my boss, Kareem Serageldin, and enhance my job performance.”

Year-End Bonus

Asked by the judge if he received any monetary benefits, he said, “Yes, a year-end bonus, your honor.”

Higgs and Siddiqui, who worked for Higgs and was based in Manhattan, signed cooperation agreements with U.S. authorities in the probe. Lawyers for both said in court that they are also cooperating with the SEC.

Siddiqui, a Dartmouth College graduate who now lives in McLean, Virginia, said that at the end of 2007 he was directed by Higgs and a person he said was “my boss’s boss at Credit Suisse” to mark down the ABN1 trading book.

“I knew that what I was directed to do, and did, was wrong,” Siddiqui said. “Specifically on or about Dec. 31, 2007, I had a telephone conversation with my supervisor during which he communicated this directive.”

After court, Ira Sorkin, Siddiqui’s lawyer, identified his client’s immediate supervisor who led the scheme as Higgs and said Serageldin was Higgs’s boss who had known about the manipulated assets.

‘Cooperating’

“He played a minor role in the conspiracy,” Sorkin said. “He has been cooperating both with the Securities and Exchange Commission and the U.S. Attorney.”

The evidence against the three men includes internal e-mails and telephone conversations recorded in keeping with Credit Suisse policy, said Assistant U.S. Attorney Virginia Chavez Romano in court. In addition to Higgs, a court document refers to four Credit Suisse employees without naming them.

In a phone call on Sept. 17, 2007, a data-entry employee in the ABN1 book who reported to both Higgs and Serageldin, asked Higgs: “What sort of PL do you need today?” according to the charges.

“Higgs responded that all books should end the day ‘up’ by $35 million,” according to the U.S. Later, one of the traders “artificially increased the prices of several ABN1 positions” to meet Higgs’s profit target, prosecutors said.

Beginning in late 2007, risk management officials at Credit Suisse began questioning the valuation of the AAA-rated bonds in the ABN1 book, according to the government.

‘Increasingly Illiquid’

“We should mark these down because someone is going to spot this,” Higgs was told on Jan. 4, 2008, by the Credit Suisse employee he identified as Serageldin.

“As the mortgage delinquencies increased, the value of the securities backed by the mortgages decreased and the market became increasingly illiquid,” Higgs said yesterday in court.

On March 20, 2008, Credit Suisse announced it was writing down the value of its asset-backed securities by $2.65 billion. About $540 million of that amount was attributed to the ABN1 trading book, according to the government.

“As a result of my actions, senior management of Credit Suisse was given the false impression that the ABN1 book was profitable and caused Credit Suisse to report false year-end numbers for 2007 in their books and records in their books and records,” Higgs said.

Possible Sentences

Both Higgs and Siddiqui pleaded guilty to one count each of conspiracy to falsify books and records and commit wire fraud, which carries a maximum five-year prison term and three years of supervised release.

Higgs and Siddiqui were released on $500,000 bond each and ordered to surrender their passports. Both agreed to pay unspecified restitution, the U.S. said.

Higgs, Siddiqui and Serageldin haven’t worked for Credit Suisse since their employment was terminated in 2008, said Steven Vames, a spokesman for the bank in New York.

Serageldin couldn’t be immediately reached for comment on the allegations.

A person familiar with the case said that fewer than five people will be charged as part of the CDO scheme. The person declined to be identified because the investigation wasn’t public at the time. Credit Suisse won’t be prosecuted, the person said.

CDOs are pools of assets such as mortgage bonds packaged into new securities. Interest payments on the underlying bonds or loans are used to pay investors.

Obama Mandate

In his State of the Union address to Congress last month, U.S. President Barack Obama said he would establish a financial crimes unit “to crack down on large-scale fraud and protect people’s investments.”

Robert Khuzami, the head of enforcement at the SEC, said the case wasn’t tied to that unit.

The prosecution is one of only a handful brought over charges tied to the subprime-mortgage market. The government failed in its biggest prosecution tied to the 2008 financial collapse when ex-Bear Stearns Cos. hedge-fund managers Ralph Cioffi and Matthew Tannin were acquitted in 2009 in federal court in Brooklyn, New York, of charges they misled investors who lost $1.6 billion after their fund collapsed in 2007.

2010 Convictions

Julian Tzolov, and Eric Butler, two former Credit Suisse brokers, were convicted in 2010 of a scheme to fraudulently sell subprime securities to corporate clients that cost investors $1.1 billion in losses.

The U.S. said Tzolov and Butler falsely told clients the products were backed by federally guaranteed student loans and were a safe alternative to bank deposits or money market funds. Butler was sentenced to five years in prison while Tzolov, who pleaded guilty and testified against Butler at trial, was sentenced to four years in prison.

U.S. prosecutors in Washington in 2010 decided not to bring charges against former American International Group Inc. executive Joseph Cassano after a probe into whether executives in the firm’s financial products division misrepresented the value of a portfolio of “super senior” credit-default swaps, which insured bond losses tied to the U.S. housing market.

Credit default swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt.

The cases are U.S. v. Higgs, 12-cr-00088, and U.S. v. Siddiqui, 12-cr-00089, U.S. District Court, Southern District of New York (Manhattan). The SEC case is U.S. Securities and Exchange Commission v. Serageldin, 12-cv-00796, U.S. District Court, Southern District of New York (Manhattan).

–With assistance from Dakin Campbell in San Francisco, David Glovin and David Evans in New York, Joshua Gallu in Washington and Elena Logutenkova in Zurich. Editors: Michael Hytha, Peter Blumberg

To contact the reporters on this story: Patricia Hurtado in New York federal court at pathurtado@bloomberg.net; Bob Van Voris in New York at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Article source: http://www.businessweek.com/news/2012-02-01/ex-credit-suisse-traders-plead-guilty-to-cdo-bonus-scheme.html