Three in custody over bond

Three executives from a stockbrokerage firm that was at the center of a scandal involving a 280-million-euro government bond sold to pension funds at an allegedly inflated price yesterday became the first suspects to be remanded in custody over the affair which rocked the then conservative government in 2007. In a decision made public yesterday, a council of appeals court judges in Athens ruled that Sofoklis and Theodoros Priniotakis and Giorgos Apostolidis of the Acropolis brokerage house should be held in custody because there was a high risk that they would commit an offense if they were released. The judicial council had to rule on the case after investigating magistrate Yiannis Lekkas and appeals prosecutor Antonis Liogas failed to agree on what should happen to the three suspects after they testified as part of the probe into the bond sale. The judge had recommended they be released after posting bail of 500,000 euros each. The three executives have been charged with fraud, tax evasion and money laundering. Agapios Simeoforidis, the ex-president of the Civil Servants’ Auxiliary Pension Fund (TEADY), which was one of the four organizations that purchased the bond, told Liogas in June 2007 that TEADY invested in the allegedly overpriced paper after a recommendation from the Acropolis brokerage. A probe was launched into the sale of the structured bond after it emerged that four pension funds had allegedly bought it at an allegedly inflated price after it had been traded by several brokerages and banks. The affair had threatened to destabilize the New Democracy government before the September 2007 general elections. In June 2007, investment bank JP Morgan struck a deal with the pension funds to buy back the 280-million-euro bond after the government promised to compensate them for interest they would have earned had they placed the money in a central bank deposit instead.

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