uly 14 (Bloomberg) -- Former IKB Deutsche Industriebank AG chief executive officer Stefan Ortseifen became the first person in Germany to be convicted over the financial crisis and was given a 10-month suspended sentence by a German court today.
The Dusseldorf Regional Court convicted Ortseifen for misstating IKBâs risks regarding asset-backed securities tied to the U.S. mortgage market in a press release, which his trial centered on. The former executive has denied wrongdoing. In addition to the suspended term, Ortseifen must pay a penalty of 100,000 euros ($127,000), which will go to charities.
âIt wasnât our task to investigate the reasons for the financial crisis, the role of the banks or the rating agencies,â presiding judge Brigitte Koppenhoefer said after delivering the verdict. âWe simply had to look into whether Mr. Ortseifen violated criminal statutes by the acts he was charged with.â
Ortseifen faced claims he misled investors by downplaying the effect of the U.S. subprime crisis in a July 20, 2007, press release. IKB received a bailout package 10 days later and subsequently got as much as 12 billion euros in guarantees from Germanyâs bank-rescue fund.
The press release was misleading, because it gave the impression that IKBâs exposure to subprime was minor, Koppenhoefer said.
Ortseifenâs lawyer Rainer Hamm had asked for an acquittal and said his client would appeal todayâs decision.
Prosecutor Nils Bussee had sought the 10-month suspended prison term and an âadequateâ penalty.
At the opening of the case in March, Ortseifen blamed Deutsche Bank AG for causing IKBâs near-collapse in 2007. Deutsche Bank Chief Executive Officer Josef Ackermann testified at the trial that IKBâs capital base was in peril before Deutsche Bank ended its credit line.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aNrHwP5T3rEc&pos=7
Hear, hear. 10 month suspended prison term for misleading investors in a press release. White collar crime : it pays off....
