Trial of former Credit Suisse employees over securities fraud was delayed

A U.S. judge delayed the trial of a former Credit Suisse Group AG employee on securities fraud charges to await the return on Monday of a co-defendant who fled to Spain. Jury selection had been scheduled for Monday for the trial in Brooklyn federal court of Butler, 37, after Tzolov escaped house arrest in May. He was arrested in Marbella, Spain last Wednesday and arrived at Newark, New Jersey airport near New York on Monday afternoon in the custody of FBI agents.

Earlier, Judge Jack Weinstein granted a government request to delay the trial after prosecutors told him Tzolov was expected back. The judge ordered a two-day delay until Wednesday.

The former Credit Suisse colleagues Julian Tzolov and Eric Butler, who helped run a cash management unit at Credit Suisse for corporate clients, are indicted on charges of fraudulently trying to earn higher commissions worth millions of dollars in $1 billion worth of deals in auction-rate securities. Butler and Tzolov lied to clients about how the money was invested, causing them to lose on investments they believed were safe, said prosecutors.

According to Credit Suisse, the employees resigned in 2007 after the firm suspended them for "prohibited activity." The brokers were accused of securities fraud, conspiracy to commit securities fraud and conspiracy to commit wire fraud. Besides, they have been indicted on 14 counts of wire fraud in Manhattan, a separate federal district.

Furthermore, Tzolov faces additional charges of jumping bail and illegally obtaining a permanent U.S. residence card. Dimitre Ivanov, one of two sureties on Tzolov's $3 million bail, appeared in court on Monday to ask the judge not to be held responsible for the bond because he helped the government in its efforts to find Tzolov. The judge stayed any ruling for one month.