Commerzbank Fined 650,000 Euros for Deals With Defunct Cypriot Bank

Cypruss securities regulator on Friday imposed a 650,000-euro ($730,800) fine on Germanys Commerzbank for its role in transactions carried out by a local bank that collapsed during the countrys 2013 financial crisis.

The countrys CySEC commission said Commerzbank had been sanctioned over investment operations conducted by the now-defunct Laiki—also known as Cyprus Popular Bank—in 2011, following Laikis merger with Greeces Marfin-Egnatia Bank.

Commerzbank declined to comment on the case, which followed an eight-year probe by Cypriot authorities.

The investigation, which was launched following calls by left-wing AKEL lawmaker Irene Charalambides, looked into whether the Cypriot deals may have broken laws prohibiting a company from buying its own stock.

CySEC said Laiki invested in two structured products issued by Commerzbank in 2008. Marfin-Egnatia, which was at that time a Laiki subsidiary, was an index sponsor responsible for the composition of the portfolio.

As a result of the 2011 merger between Laiki and Marfin-Egnatia, Laiki became the index sponsor, creating a conflict of interest, CySEC said.

It said Laiki and Commerzbank acted in “concert” to manipulate the market in relation to Laiki shares on several occasions in April and May 2011.

CySEC said it had not fined Laiki because it is in administration and did not want to put an additional burden on former depositors, bond holders and shareholders.

Laiki, once Cypruss second-largest bank, was taken into administration and wound down under terms of a 10-billion-euro ($13.56 billion) international financial assistance package to Read More – Source