Ex-Credit Suisse trader pleads guilty in subprime probe A former London-based Credit Suisse managing director pleaded guilty Wednesday and agreed to cooperate in a federal probe of securities traded in the sub-prime mortgage securities market, admitting that he falsified the books to enhance his standing in his company and his year-end bonus. David Higgs pleaded guilty in Manhattan to a charge of conspiracy to falsify books and records and commit wire fraud, which carries a potential maximum sentence of five years in prison. Today is a terribly difficult day for me and my family. I am truly sorry for what I've done," Higgs said. The defendant said he falsified records to enhance his job performance, which resulted in higher bonuses. Others expected to be charged in the probe - which focuses on activities in 2007 and 2008 - have not been identified publicly. Authorities said another person was in custody Wednesday, facing the same charge. The probe centers on exaggerations brokers made about the value of subprime mortgage securities. Authorities say brokers enticed investors to pour money into the securities market for subprime mortgages by making the market sound healthy. Higgs said his crime began in 2007, when the real estate market began to deteriorate in the United States and the valuations of mortgage-backed securities faced significant reductions. He said a rising rate of mortgage delinquencies meant that the value of the securities backed by the mortgages decreased. "Rather than mark these securities down to market as we were required to do," he said, Higgs and others manipulated and inflated the cash bond position markings of a trading book to hide losses in the book and meet monthly profit-and-loss objectives. He said the manipulations led senior management at Credit Suisse to get the false impression that the securities were profitable and caused the investment firm to report false year-end numbers for 2007 in their books and records. "I did this because I wanted to remain in good favor with my boss ... and enhance my job performance," Higgs said. Questioned by Judge Alison Nathan, Higgs said enhanced job performance would result in higher year-end bonuses. Higgs will remain free on $500,000 bail and will be permitted to remain in England while he cooperates with prosecutors. His lawyer, John L. Brownlee, declined to comment.