The High Constitutional Court has dismissed the appeal filed by four former senior executives of Laiki (Popular) Bank against a decision of the Cyprus Securities and Exchange Commission (CySEC) imposing substantial administrative fines for violations of transparency and public-offer laws.
Who appealed and why
The appellants; Efthymios Bouloutas, Eleftherios Chilliadakis, Markos Foros and Panayiotis Kounnis, sought to annul CySEC’s 28 April 2014 decision that fined them for breaches of Law 190(I)/2007 and Law 114(I)/2005, including misleading statements in Laiki’s 2010 financial reporting.
The penalties
According to the Court’s ruling, CySEC imposed the following administrative fines:
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€705,000 on Bouloutas
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€170,000 on Chilliadakis
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€90,000 on Foros
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€430,000 on Kounnis
The Court found the appellants failed to prove bias on the part of the CySEC Chair, despite allegations related to media comments. It further held that CySEC’s prior approval of prospectuses does not absolve signatories from the Article 20(4) obligations of Law 114(I)/2005 — namely, to ensure accuracy, completeness, clarity and timeliness. Articles 20(4) and 41(1) were deemed applicable, and CySEC acted within its lawful powers in levying the fines.
The underlying issues
During the administrative process, CySEC examined statements in Laiki’s semi-annual and annual 2010 accounts, particularly regarding exposure to Greek Government Bonds (GGBs). It concluded that heightened risks were not adequately disclosed as required by law.
With the High Constitutional Court’s decision, the legality of the fines is confirmed, and the appellants’ attempt to overturn CySEC’s sanctions on grounds of unfairness or procedural defects is rejected.
Source: CNA