Salmaan Siddiqui will be sentenced by a New York federal judge in a little more than 24 hours. He was convicted of one count of conspiracy to falsify books and wire fraud for helping Credit Suisse AG hide mortgage losses in the run up to the financial crisis. He faces years in prison, however his lawyer says he should not go to jail at all. (Siddiqui’s boss, Kareem Serageldin was sentenced last November to 30 months in prison.) The real story isn’t whether Mr. Siddiqui goes to prison, its what he has to say to the judge and just how deep the culture of bank fraud runs within the “too big to fail” world of banking.
Siddiqui’s primary argument, according to a sentencing memorandum filed last week by his lawyers, claims that he provided substantial cooperation to the feds and that he was acting under orders from above. Both of those claims need to examined.
We call “substantial cooperation” whistleblowing after the fact. Siddiqui says that when he was first asked to do something wrong, he resisted. Obviously, he gave in to the pressure and used his position as a trader with Credit Suisse to hide the bank’s mortgage losses. Like many others in Siddiqui’s position, we believe him. And like so many others in Siddiqui’s position, once the threshold was crossed, he did it again and again.
The difference between a whistleblower who becomes a hero and may even be paid for his or her efforts and one that will forever be a convicted felon is when that person decides to cooperate and do the right thing.
Most everyone will cooperate when facing years in prison. Many, however, do not have the strength and conviction to stand up and say no to fraud and misconduct. Standing up and saying no may mean the loss of your job (although there are whistleblower protection and anti retaliation laws in place that can provide assistance). Standing up and saying no may also mean being ostracized by colleagues and co-workers. It does keep you from wearing orange and doing the “perp walk” on the evening news, however.
Acting Under Orders
Siddiqui goes through extraordinary efforts to accept responsibility for his actions and then in a single paragraph says in effect, “I was acting under orders”. Does that somehow make things right? You be the judge of what Siddiqui told the court: “Not only did Mr. Siddiqui act under the instruction and supervision of his co-conspirators here, but he was merely filling the role of an absent co-worker…Salmaan was not motivated by profit like the average participant in the crime of conspiracy to falsify books and wire fraud.”
Immediately I think of the prison guards at Auschwitz, not that I am comparing bank fraud to genocide. My analogy is not between the crimes but is directed at whether committing a crime while acting under orders can be legal justification for crime. And the answer is no.
Unlike Nazi Germany, no one put a gun to Salmaan’s head and forced him to falsify bank records. He clearly knew what he was being asked to do was bank fraud. He did it anyway and now hopes the court will show leniency because his boss told him it was okay.
We do believe that Salmaan Siddiqui should be shown leniency. The court should do so based on his cooperation and not because of he was acting under direction from his superiors. Had Siddiqui been a bit smarter, he would not be standing before a federal judge tomorrow awaiting his fate.
That’s our two cents. What is your opinion? Write to us and let us know.
The lawyers at Mahany & Ertl represent whistleblowers and help them receive the maximum possible award. We also sue banks and mortgage companies for engaging in bank fraud. We represent the whistleblower in HUD’s $2.4 billion civil prosecution of Allied Home Mortgage and the whistleblower in the just announced Vanguard mutual fund case. The author of this post, attorney Brian Mahany, can be reached at or by telephone at (direct). All inquiries kept in strict confidence.