Cyprus Supreme Court Upholds Fines Against Former Laiki Bank Directors

The Supreme Constitutional Court of Cyprus has upheld long-standing administrative fines issued by the Cyprus Securities and Exchange Commission (CySEC) against four former board members of the now-defunct Cyprus Popular Bank (Laiki Bank), marking the end of a decade-long legal battle over the bank's 2010–2011 financial disclosures.

In its ruling on October 15, 2025, the Supreme Court dismissed Appeal No. 8/21, confirming earlier judgments by both CySEC and the Administrative Court. The appeal had been filed by former directors Efthimios Mbouloutas, Eleftherios Chiliadakis, Markos Forou, and Panayiotis Kounni, who were found responsible for misleading information in the bank's financial reports and capital-raising prospectuses.

The case stemmed from CySEC's 2014 investigation into Laiki Bank's public disclosures ahead of Cyprus's 2013 banking crisis. Regulators concluded that the bank's half-year and annual reports for 2010, along with four prospectuses issued between May 2010 and May 2011, contained inaccuracies and omissions about its financial condition. These prospectuses were used to raise capital from investors during a period when the bank's stability was already in question.

CySEC found that the directors had breached the Transparency Requirements Law and the Public Offer and Prospectus Law, both of which require full and accurate disclosure from listed companies. While CySEC had approved the prospectuses at the time, it later determined that such approval did not shield the signatories from personal accountability.

The four former executives initially contested the decision at the Administrative Court, alleging procedural unfairness and bias by CySEC's leadership. The court, however, dismissed those claims in November 2020, ruling that CySEC had acted within its authority and that the directors were legally accountable for the accuracy of the documents they signed.

The subsequent appeal to the Supreme Court was similarly rejected. The Court concluded that "the findings of the first-instance court were correct," affirming that regulatory approval does not negate directors' statutory responsibility to ensure accurate financial disclosures.

The ruling effectively closes one of Cyprus's most significant post-crisis regulatory cases. Laiki Bank, once the country's second-largest lender, collapsed in 2013 amid heavy exposure to Greek sovereign debt, triggering the unprecedented "bail-in" of depositors and reshaping Cyprus's financial landscape.

CySEC welcomed the Supreme Court's confirmation, stating that the decision "reaffirms the Commission's role in safeguarding transparency and investor protection in Cyprus's capital markets."

With the Supreme Court's endorsement, the 2014 enforcement action against the former Laiki Bank board members now stands as final, cementing the principle of personal accountability in corporate financial reporting more than a decade after the crisis that brought down one of Cyprus's largest banks.