Cyprus Mail
Cyprus

Investors to sue banks in CSE bubble and meltdown case

Former Bank of Cyprus CEO, Andreas Eliades

By Angelos Anastasiou

THE Attorney General’s office will allow for two private lawsuits to be brought against banks and individuals concerning market manipulation during the stock market bubble in 2000 and the run-up to the ongoing financial meltdown from 2009 to 2012, news report said yesterday.

The consent was granted to the law firm of Kostas Melas by deputy Attorney General Rikkos Erotokritou to bring various companies and individuals before court on market-manipulation charges, local daily Politis reported.

The list of entities and individuals to face prosecution includes the Bank of Cyprus, Hellenic Bank, investment firms Cisco and Sharelink, and former Bank of Cyprus CEOs Andreas Eliades and Yiannis Kypri.

The requests for consent had been pending with the Attorney General’s office for several years, and were only recently forwarded to the police for investigation.

“There are two cases,” lawyer Kostas Melas, who represents the plaintiffs, told state radio yesterday. “One has been pending for years, and unfortunately the then-Attorney General had not acted on it, despite our client’s repeated pleas, so we finally decided to resort to a private suit.”

According to Melas, the first attempt at getting the nod from the AG’s office was denied as the case formed part of the wider ongoing investigation on the collapse of the economy.
But Melas persisted and his request was finally granted.

“We will be filing the suits in the coming days,” he said.

The first case relates to the stock market bubble 14 years ago, and has been filed by Christos Kalotychos against Hellenic Bank and its investment arm, the Bank of Cyprus,Cisco,
Yiannis Kypris, Yiorgos Karayiorgis, Stavros Agrotis and Mary Demetriou.

The accused had allegedly manipulated the market by coming to an undisclosed agreement to buy each other’s shares in order to artificially prop up their prices at the expense of unsuspecting investors.

The issue was the subject of scrutiny by the securities watchdog CySEC, resulting in the identification of criminal liability, which lies outside the body’s remit.

“It’s certainly not a good thing that the incidents took place so many years ago,” Melas commented. “But we were only granted consent to press ahead, and we will do so with everything we have.”

The second private lawsuit has been filed by Antonis Ioannou against the Bank of Cyprus and several bank officials – Andreas Eliades, Yiannis Kypri, Georgios Georgiades, Andreas Artemis, Costas Severis and Costas Hadjipapas – for violating fiduciary duties.

Specifically, they are accused of deliberately withholding information or otherwise misleading investors with regard to the BoC’s investments in Greek bonds while being privy to confidential information.

Among other allegations, Yiannis Kypri reportedly announced on December 10, 2009, that the BoC had evaluated Greek bonds as “risky” and intended to divest its holdings.

However, without informing investors, the BoC subsequently purchased a large package of Greek bonds.

The issue had incurred fines for the accused by the Securities and Exchange Commission (CySEC).

“The CySEC decision is the tool with which to support and evidence criminal liability,” said Melas.

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