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UPDATE 1-French bank Natixis under formal investigation over sub-prime losses
February 15, 2017 / 1:37 PM / in 10 months

UPDATE 1-French bank Natixis under formal investigation over sub-prime losses

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By Maya Nikolaeva

PARIS, Feb 15 (Reuters) - Natixis has been placed under formal investigation in France over statements the bank released regarding its financial position at the start of the global sub-prime lending crisis in 2007, it said on Wednesday.

The bank, formed in December 2006 out of the merger of state-backed parent BPCE’s Ixis and Natexis units, was hit the hardest among French banks by the financial crisis and had to be rescued from near-collapse by BPCE.

The investigation stems from complaints first made in 2010, relating to two announcements released in the second half of 2007, Natixis said.

Colette Neuville, head of the French shareholder lobby group ADAM, told Reuters that about 1,000 complaints have been sent to the investigating authorities and that many of those private shareholders had been encouraged to buy Natixis shares before their price plunged in the financial crisis.

“This is a scandal that has affected many small investors,” Neuville said.

Natixis denies that it had provided misleading information in the 2007 statements.

“Natixis considers that it provided to the public, in good faith, the information available to it about its exposure, and as and when any underlying risks were identified,” the company said in a statement.

The bank was investigated by the AMF financial market watchdog in 2010 to determine whether it had concealed losses in late 2008 at the height of the crisis. No charges were brought as a result of the investigation.

Additional reporting by Sudip Kar-Gupta; Editing by David Goodman

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