The logo of the French bank Natixis, August 28, 2018 in Paris (AFP/Archives/JOEL SAGET)
The Paris Court of Appeal on Tuesday reduced the fine imposed on the Natixis bank from 7.5 million to 2 million euros for its communication during the subprime financial crisis.
Natixis, a subsidiary of the mutual banking group BPCE created and listed on the stock market at the end of 2006, was once again found guilty, as at first instance in 2021, of having disseminated misleading information on its exposure to “subprime”, in the only French trial major linked to the financial crisis.
In a November 2007 press release, on its results for the third quarter of the year, the bank reported “limited” risks linked to these mortgage loans distributed in the United States, which dragged finance into the deep crisis of 2007 -2009.
In its judgment, the criminal court considered that the bank “knowingly disseminated misleading information, in particular by communicating figures for exposure to subprimes without ever specifying the assumptions used”.
He was also accused of having notably failed to report certain exposures amounting to 850 million euros.
All these elements “did not allow the market to correctly assess” the prospects of the establishment, estimated the judges of first instance, stressing that there was an “assumed deception at the highest level of the management of Natixis and intended to preserve the company’s stock price.
When contacted, BPCE did not wish to comment on the decision.
– Fall in price –
The crisis caused the Natixis share price to fall on the stock market, going from 19.55 euros at its IPO in 2006 to less than one euro per share in 2009.
In their particularly harsh judgment, the judges considered that “all the bodies and representatives of Natixis (at the time, Editor’s note) were informed” and “the offense was committed with full knowledge of the facts”, they added, citing former bank manager Dominique Ferrero by name.
Natixis “always considers that it has provided the public, in all sincerity, with the information it had on its exposures, as their underlying risks were identified”, the bank maintained in announcing its decision to appeal .
The bank also recalled that “the elements of the press release concerned had already been examined by the Financial Markets Authority (AMF)” and that it “had decided that there was no reason to initiate legal proceedings”. against Natixis”.
To date, “this is the only subprime case that has reached a criminal court in all of Europe”, noted deputy prosecutor Patrice Amar during the debates during the first trial.
The court of appeal confirmed some of the damages awarded to the civil parties at first instance.
These include small holders, the securities having been massively distributed to individual customers of the BPCE group’s retail networks during the establishment’s IPO.
© 2024 AFP
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