The former chief of German bank IKB has been found guilty of market manipulation and given a 10-month suspended sentence. He was also given a hefty fine for misstating investment risks.
Ortseifen intentionally misstated IKB's financial position
The former head of German lender IKB Deutsche Industriebank, Stefan Ortseifen, was found guilty on Wednesday of manipulating the bank's share price at the start of subprime crisis. He was given a 10-month suspended sentence.
Ortseifen, who took up a position on the IKB board of directors in 1994, was also fined 100,000 euros ($127,000), which must be paid to charities.
"Ortseifen wanted to manipulate IKB's share price, that was his goal," said prosecutor Nils Bussee. "He wanted to make the impression that, when it comes to subprime risks, everything was fine."
The prosecution had argued that Ortseifen intentionally tried to raise the share price of his company by misstating the effect the US subprime mortgage crisis had had on IKB. The bank deals mainly with small and medium-sized businesses.
Prosecutors had sought a 10-month sentence during the case brought before Duesseldorf District Court.
Ortseifen is the first top German banker convicted in connection with the financial crisis, which led to billions in losses for investors and financial institutions around the world.
In 2007, IKB received financial aid from the KfW Group and other banking associations, and eventually received guarantees to the tune of up to 12 billion euros from Germany's SoFFin government program, which was set up to restore confidence in the financial sector.
Author: Darren Mara (dpa/AP)
Editor: Chuck Penfold