Page last updated at 07:52 GMT, Tuesday, 18 August 2009 08:52 UK

US banker found guilty of fraud

Boarded up house in the US
The fraud began to unravel when the US housing market slumped

A former Credit Suisse banker has been found guilty of fraud after deceiving investors into buying risky investments that led to $1bn (£610m) of losses.

A jury in New York needed less than a day's deliberation to find against Eric Butler. His co-defendant, Julian Tzolov, had already pleaded guilty.

The two sold high-risk US sub-prime investments to people who were told they were buying much safer products.

They did this as it meant they received much higher commissions.

Unknown risks

The fraud started to unravel towards the end of 2007 when the US housing market began to stall, and bad debts in the sub-prime mortgage market started to be revealed.

They deceived clients who had trusted them
Assistant US Attorney John Nowak

Butler faces a prison sentence of up to 45 years. Tzolov may get a lesser sentence because he agreed to help prosecutors, and testified against his former Credit Suisse colleague.

"The defendants' fraudulent misrepresentations saddled investors with unknown risks they did not bargain for," said Benton Campbell, the US Attorney for the Eastern District of New York.

Butler and Tzolov deceived a number of corporate clients including drugmaker Roche, semi-conductor business ST Microelectronics, and Canadian fertiliser firm Potash Corporation.

"It was a bait-and-switch scheme," said Assistant US Attorney John Nowak.

"They deceived clients who had trusted them."

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