You are here

New CySec investigations for banks

10/03/2016 06:52
The Cyprus Securities and Exchange Commission expects to investigate three more cases related to the 2013 bank collapse by the end of 2016, according to its president, Demetra Kalogerou.

The investigations relate to the investment Bank of Cyprus made to the Romanian Transilvania bank, another case relating to Commerzbank products and the provision of Emergency Liquidity Assistance to the now-defunct Laiki Bank.

The latter case is also being examined by the parliament.

Speaking during a presentation of the work of CySec for 2015, Ms. Kalogerou said that the Board of CySec will decide soon on issue of the ELA obtained from ex - Laiki Bank during the period 2011-2013.

She noted that the commission is investigating a possible market manipulation , because the bank didn’t announce the receipt of ELA to investors.

As Kalogerou said, the issue was only communicated with two announcements at the end, after the takeover of the bank from the government with €1.8 billion in May 2012. Laiki Bank has started borrowing from the ELA in September 2011 and the amount climbed from € 490 mil., to € 9,20 bn. in early 2013.

The Bank had included the ELA figures in its annual accounts.

Ms. Kalogerou also said that the issue will be examined by the Attorney General for criminal matters and if no such issues arise, CySec will issue an announcement.

She also expressed the hope that during 2016 all pending investigations related to the bank collapse, will be completed.

Kologerou noted that in 2016 two more investigations in relation to facts in 2013 will be completed, on Commerzbank and on Banca Transilvania, to decide whether there was market manipulation in Cyprus.

Kalogerou also said that in the years 2014 - 2015 the commission has completed the investigation of five cases concerning the collapse of the economy in 2013, relating to the goodwill of Uniastrum Bank for the Bank of Cyprus and Laiki Egantia for Laiki bank, the reclassification of Greek bonds in the accounts of the Bank of Cyprus, the provisions for the loans of Bank of Cyprus and the provisions of the loans of Marfin Investment Group (MIG).

As Kalogerou said, all these were conferred to the attorney general to investigate any criminal wrong-doings and if no criminal offenses arise, then the Commission has the power to impose administrative fines.

She also referred to the first cases that have been brought to justice and concern the capital adequacy of the Bank of Cyprus, the announcements of various officials for misleading statements and the issue of investment on Greek bonds by Bank of Cyprus and Laiki Bank.

As regards investment firms (CIF), the President of the CySec said that in 2015 there were thorough spot checks under the supervisory program. Based on the weaknesses identified, the commission imposed fines amounting to € 1.7 mil., and in both cases there was a compromise for a total amount of € 685,000.

CySEC is under fire from international investors for its treatment of IronFX, which was led into disarray after the Swiss franc devalued in early 2015.

Kologerou said that, despite the challenges that remain for Cyprus economy after the exit of the economic adjustment program, the submission of applications to the CySec from Cyprus and abroad for permitting new supervised entities continued. As a result of the interest, supervised by CySec entities have already exceeded 550. This interest, as she said, undoubtedly shows that Cyprus still has substantial advantages and is an attractive investment destination.

Referring to Cyprus`s progress on the issue of the fight against money laundering, Kalogerou said that a major change made was the creation of a specialized unit of CySec, to deal with checking compliance of the regulated in relation to their obligations for the prevention of money laundering and terrorist financing. The department carried out, among others, 21-spot checks during the year. According to Kalogerou, there was no laundering issue.

She added that the latest ratings of Cyprus by Moneyval, the Global Forum and the relevant committee of Troika, on the subject of laundering, were positive.