PARIS (Reuters) -A French criminal court on Thursday ordered investment bank Natixis to pay a 7.5 million euros ($8.95 million) fine after finding the bank guilty of misleading investors in 2007 on its financial strength related to its sub-prime exposure.
Natixis denied any wrongdoing. Eric Dezeuze, a lawyer for the bank, said it was assessing a possible appeal with a decision to be taken within 10 days.
Natixis was among the French banks hit the hardest by the financial crisis in 2007, when bonds backed by low quality mortgages – dubbed sub-prime loans – collapsed, causing losses for many lenders as the fallout spread through financial markets.
Natixis was eventually rescued by its parent bank BPCE and was later restructured.
“Natixis did not simply make a mistake in evaluating its exposure, it intentionally misled the market”, the court ruled, saying that the bank’s communication was “unintelligible”.
Judges also ordered compensation for damages to retail investors. The bank’s lawyer Dezeuze told reporters the compensation could amount to around 1 million euros.
“Of course, the ruling is not in line with our expectations”, Dezeuze told reporters.
“We are considering the possibility of an appeal once we have read the judgment in more detail”, he said.
The case centred on a statement published in November 2007 by the bank regarding its subprime exposure. Natixis said it was not misleading as it could not have anticipated how the crisis would later escalate.
French shareholders association Adam filed a complaint in 2009 on behalf of hundreds of retail investors, demanding investigations into Natixis’ financial communications from 2006, when the bank was listed, until 2009.
The French financial watchdog AMF also looked into whether Natixis misled investors during the 2007 sub-prime crisis but decided not to bring any charges against the bank.
($1 = 0.8377 euros)
(Reporting by Matthieu Protard; Editing by Sudip Kar-Gupta, Richard Lough, Edmund Blair and Jane Merriman)
The post Natixis fined 7.5 million euros in sub-prime exposure case appeared first on Morningology.
