Cyprus watchdog asks UK to help with Laiki probe

Cyprus’s securities regulator will ask for assistance from Britain in a probe into transactions ordered by now-defunct Laiki Bank and conducted by Germany’s Commerzbank, it said on Tuesday.

The Cypriot Securities and Exchange Commission (CySEC) is investigating transactions made by Laiki and arranged by Commerzbank after complaints from a local lawmaker that the deals may have broken laws prohibiting a company from purchasing its own stock.

Cypriot lawmaker Irene Charalambides, who filed a complaint to Cypriot authorities and to German’s financial services regulator Bafin, as reported by Reuters last week, alleges Commerzbank sold two structured products that acted as vehicles for Laiki to buy stock in itself and affiliates.

Commerzbank has said it has no indication of any wrongdoing by Commerzbank related to the securities.

The bank declined to comment on Tuesday.

Laiki, once Cyprus’s second-largest bank, was taken into administration and wound down under terms of a 10-billion-euro international financial assistance package to Cyprus in March 2013.

Some 4.3 billion euros in uninsured deposits exceeding the EU threshold of 100,000 was wiped out.

On Monday, Charalambides said she had also asked Britain’s Financial Conduct Authority to assist in the probe because, she said, the structured products were arranged by a Commerzbank branch in the UK.

The FCA had no immediate comment.