A leading City investment bank has uncovered a £1.4 billion scam by rogue traders desperately trying to protect their bonuses.

Credit Suisse, which employs hundreds of people in Canary Wharf, discovered the problem last month but today is the first time it has revealed that traders had cooked the books.

Traders are believed to have deliberately tried to cover up the scale of their losses in complex financial instruments, probably to boost their year-end bonuses.

Originally the bank said that the traders had accidentally "mismarked" the prices of the financial instruments.

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But today it said that it had "determined that the pricing errors were, in part, the result of intentional misconduct by a small number of traders".

The news raises fears that other banks are sitting on massive losses which have yet to come to light.

Credit Suisse said all the traders involved had now either been fired or suspended.

The bank has always refused to name any of the traders involved but it was revealed by the London Evening Standard that the team was headed by Kareem Serageldin, a managing director at the bank who left last month.

Credit Suisse admitted that an internal review "found that controls put in place to prevent this activity were not effective".

In a statement today, it warned it was now unlikely to post a profit for the first quarter because of the trading scam.

It said: "With regard to 2008, including valuation reductions, Credit Suisse was profitable through the end of February.

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