The Bank of Cyprus and now defunct Popular Bank have been given huge fines by the Cyprus Securities and Exchange Commission (CySec) for issuing misleading information to the public and manipulating financial figures on their investment in Greek bonds, ‘Cyprus Mail’ reports.
Administrative fines to Bank of Cyprus, members of its Board and senior executive officials, who resigned following the request for state support, amount to €3.52 million. Fines to defunct Cyprus Popular Bank, key members of its Board and senior executives were €4.06 million.
The bonds were impaired in 2012 as part of an EU/IMF package to rescue the Greek economy resulting to a loss of €4.5 billion for the Cypriot banks which corresponded to 25% of the island’s GDP.
These losses and the bank’s failure to raise capital from private sources ultimately prompted Cyprus itself to request financial assistance from the EU and IMF.
Lawyers representing the former executives of both banks are challenging the heavy fines imposed by the Commission.