Looks like it's payback week: Federal prosecutors are planning to file fraud charges against four former Credit Suisse traders accused of overstating the value of mortgage securities in order to boost their bonuses, the Wall Street Journal reports. The alleged fraud happened in early 2008 as problems with complex mortgage securities threw the markets into turmoil.
The probe stemmed from $2.85 billion in write-downs that Credit Suisse took in 2008, blaming them on a group of rogue traders. The bank itself will not be charged in the case. Prosecutors and regulators have stepped up their scrutiny of mortgage write-downs in recent months, and more cases are being prepared, sources say. Another contributor to the financial crisis, former Royal Bank of Scotland chief Fred Goodwin, was stripped of his knighthood yesterday.