The supreme constitutional court on Thursday upheld stinging fines that had earlier been slapped on four former senior executives at now-defunct Laiki Bank.
The fines had been imposed on four individuals by the Securities and Exchange Commission (SEC). The SEC deemed them to have broken the rules regarding transparency and public offers.
Specifically, back in April 2014 the market watchdog had determined that four bank execs had misrepresented Laiki’s risk exposure to Greek government bonds – thus misleading shareholders.
The SEC examined signed statements in the bank’s six-monthly and yearly bulletins for the year 2010, finding that the investment risk was not adequately stated.
The four bank execs fined were Efthymios Bouloutas (€705,000), Eleftherios Chiliadakis (€170,000), Markos Foros (€90,000) and Panayiotis Kounnis (€430,000).
Subsequently, the four appealed the decision, arguing that the SEC’s decision was “biased” and that the watchdog lacked the authority to impose fines in this case.
The appeal was adjudged at the supreme constitutional court, which rejected the bankers’ arguments and upheld the SEC fines.
Laiki Bank, also known as Popular Bank, had significant exposure to Greek government bonds, which contributed to its collapse during the 2013 financial crisis. The value of these bonds, held by the lender, was impacted by Greece’s debt crisis, leading to deposit outflows and a heavy reliance on emergency funding from the European Central Bank.
Following a downgrade of its own credit rating, Laiki was eventually wound down, and its assets and insured deposits were transferred to the Bank of Cyprus, with uninsured deposits being written off.
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