Fund hits brokers with a lawsuit

A civil servants pension fund that is believed to have been overcharged millions of euros for a state bond has lodged a lawsuit against the brokerage house that recommended the investment move. The Civil Servants’ Auxiliary Pension Fund (TEADY) is seeking damages of more -8 million from the Acropolis brokerage it says misled the pension fund for its own gain. «With their investment proposals, they (Acropolis) encouraged the fund to go ahead with the investment but in reality intended to use their subsidiaries to bump up the acquisition price and to sell them (the bonds) at an unrealistically high price,» the legal notice read. TEADY is believed to be one of five funds that purchased part of a -280 million state bond from Acropolis at prices well above those quoted by the secondary bond market. The pension fund said that its legal case relates to a -70 million bond purchased it in August last year. It is also calling for criminal charges of fraud and embezzlement to be laid against the brokerage’s board members. Finance Minister Giorgos Alogoskoufis said earlier this month that improper advice given to the country’s pension funds by banks and brokerages, resulting in financial losses, could constitute grounds for taking legal action against them to recover the lost funds.

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