BUSINESS

Cypriot watchdog fines Commerzbank

TAGS: Banking, Justice

Cyprus’ securities regulator on Friday imposed a 650,000-euro fine on Germany’s Commerzbank for transactions ordered by a now defunct local bank whose demise featured in a financial crisis which roiled the country in 2013.

The Cyprus Securities and Exchange Commission (CySEC) said the administrative fine was imposed for the role Commerzbank played in transactions carried out by Laiki, also known as Cyprus Popular Bank, in 2011, subsequent to a cross-border merger with Greece’s Marfin-Egnatia Bank.

Commerzbank declined to comment. In a separate development, Chief Executive Martin Zielke stepped down on Friday to open the way for a fresh start for the German lender, which has been under pressure from some investors over its poor financial performance.

The eight-year probe in Cyprus, called for by Cypriot left-wing AKEL lawmaker Irene Charalambides, focused on whether the Cypriot deals may have broken laws prohibiting a company from purchasing its own stock.

CySEC said Laiki invested in two structured products issued by Commerzbank in 2008, which had Marfin-Egnatia as an index sponsor responsible for the composition of the portfolio. As a result of the 2011 merger between the two entities, Laiki and Marfin-Egnatia, Laiki became the index sponsor, creating, CySEC said, a “clear conflict of interest.” [Reuters]

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