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Stiff sentences handed out over structured bond scandal

Protesters hold up black balloons reading ‘bonds’ and ‘funds’ during a rally in central Athens when the scandal first came to light in 2007.

Stockbrokers, finance executives, bank officials and pension fund managers are among the 13 people who were handed jail sentences of up to 25 years on Thursday for their part in the 2007 sale of 280 million euros in structured bonds that led to the funds paying around 20 million euros over the odds for the paper.

The criminal appeals court in Athens handed 25-year sentences to Theodoros Priniotakis and Giorgos Apostolidis of the Acropolis brokerage house, Haris Adamopoulos and Avraam Savidis of JP Morgan bank and Giorgos Papamarkakis of North Asset Management. Five managers of state-run pension funds were handed 20-year terms. They were Agapios Simaioforidis of TAYPED, Panagiota Karadima of TEADY, Panagiotis Karadimas of TEAYFE, Gerasimos Konidiaris of TSEYP and Constantinos Christidis of TEAOPEKA.

Nikos Bougos of HypoVereinsbank received a 15-year sentence. These 11 defendants were found guilty of a range of crimes, including fraud, breach of faith, money laundering, tax evasion and forming a criminal organization.

Two accountants, Angelos and Dimitris Liatis, were given five-year terms. They were found guilty of being accomplices to tax evasion.

In addition, the court ordered the seizure of property owned by Priniotakis up to the value of 6.5 million euros. It also imposed a fine of 11.6 million euros on Papamarkakis.

JPMorgan bought the bonds from the Greek government in February 2007 at 100 cents on the euro as part of a swap transaction. The bonds were then sold by the bank to North Asset Management, a London-based hedge fund, at a price of 92.95 cents on the euro. North Asset then sold the paper to HypoVereinsbank for 99.9 cents. The bank then sold the bonds to Athens brokerage Acropolis Axepey at 99.95 cents. The state-run pension funds bought the bond from Acropolis at a price of 100 cents on the euro.

Reports about the deal sparked protests and rocked the New Democracy government at the time, prompting the dismissal of then Labor Minister Savvas Tsitouridis. JPMorgan and North Asset later agreed to buy back the bonds from the pension funds at face value.

ekathimerini.com , Thursday May 29, 2014 (20:24)  
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