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Ex Laiki bankers fined for market manipulation (updated)

Defunct Laiki bank

Four former executives of the now-defunct Laiki Bank who were found guilty of market manipulation were on Friday fined €150,000 and €120,000 by the Nicosia criminal court.

Managing director Efthimios Bouloutas was fined €150,000 while vice-president Neoclis Lysandrou, deputy CEO Panayiotis Kounnis and executive board member Marcos Foros were handed a €120,000 fine.

The four had been found guilty on two charges of market manipulation and submitting false or misleading information with regards to publishing an interim consolidated financial statement in November 2011, in which they omitted to include a goodwill write-down of €330m for Marfin Popular Bank’s – as Laiki was then known – operations in Greece.

The fine concerns the second charge only. No penalty was imposed on the first charge.

In their unanimous decision, the three judges said without downplaying the seriousness of the offences and the need to impose penalties that will convey the message that any kind of dishonest and methodical deception have no place in a bank and financial system, at the same time they ought to take into consideration that in the present case, investors suffered no losses while the offenders did not gain any benefits.

The court said that element – significant loss to investors — was vital in other cases abroad where jail sentences had been imposed.

Beyond that, the court said it had also taken into account certain other mitigating factors such as the lengthy time that has gone by since the commission of the offences, the loss of their jobs, inability to repeat the offence in the future, and their clean records.

The case was referred to a criminal trial on November 28, 2016 following delays after defendants Bouloutas and Foros, both Greek nationals, refused to appear in person in a Cypriot court.

In its verdict, issued on October 12, the court said failure to include the writedown of goodwill in the bank’s financial statements could not be attributed to carelessness or a mistake, or an omission in good faith, but a wholly conscious, deliberate action in which all the defendants took part.

“It has become clear that each defendant’s sole pursuit was not to include the writedown in the financial statements and with direct and pointed diligence, to conceal the existence of such loss,” the court said.

The court said the defendants chose to approve the statements without the writedown while knowing the sensitivity of the matter and the disagreement of the external auditors.

“Approval of the financial statements in question… was not a spontaneous and hasty statement but a well-thought out and conscious decision on behalf of the defendants who knew all the information and were dealing with the issue for some time.”

The criminal court said their main concern, objective, and desire was to present a good image that would have an impact on the way it was managed by the board, as well as maintain investor interest.

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