CYPRUS: Laiki four avoid prison and walk away with fines

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Four former executives of defunct Laiki Bank were fined on Friday after being found guilty of manipulating the market, leaking false or misleading information and concealing information from the public.

The Nicosia Criminal Court imposed on Efthimios Bouloutas, then managing director of Laiki, a fine of EUR 150,000, while Neoclis Lysandrou and the executive board member Marcos Foros received fines of EUR 120,000 each.

The pecuniary penalty concerns only the charge of leaking false or misleading information and concealing information from the public. The convicted four did not receive any penalty for offences regarding market manipulation.

The one-time bankers of defunct Laiki, Efthimios Bouloutas, Panayiotis Kounnis, Neoclis Lysandrou and executive Marcos Foros were found guilty on 12 October by the Court on all the above accounts.

They were charged with market manipulation and submitting false or misleading information while publishing an interim consolidated financial statement in November 2011, in which they omitted to include a goodwill write down of EUR 330mln for Marfin Popular Bank’s – as Laiki was then known – operations in Greece.

The criminal court had ruled in March that the prosecutor had succeeded in proving a prima facie case against the accused in relation to both the charges they were facing.

The defence argued that their clients’ obligation to disclose the interim accounts of the bank were abolished under a new law and so the charges were no longer relevant.

State prosecution argued that a basic principle of Cyprus law is that offences committed before the repeal of a law are valid, so a crime was committed at that time.

Laiki Bank was closed down in March 2013 as part of the island’s bailout agreement with international lenders following a banking crisis.

Disgraced Laiki was seen as the epitome of the kind of casino banking that led Cyprus to the brink of economic meltdown.

The court agreed that the top executives had a responsibility to shareholders and customers as they were the “face” of the bank.