Spanish court jails four former managers of savings bank CAM
Reuters-Four former managers of Spanish savings bank Caja de Ahorros del Mediterraneo (CAM) were sentenced to prison by the country’s High Court on Tuesday after being found guilty of false accounting and misleading investors about the lender’s health.
Former managing directors Roberto Lopez Abad and Maria Dolores Amoros were sentenced to three years, while planning and control manager Teofilo Sogorb was given four years and risk manager Jose Martinez Garcia was sentenced to two years, nine months and a day.
Spain’s savings banks, usually controlled by local governments or other public authorities, were hit hard by a 2008 property crash, after which many of their ill-advised real estate investments turned sour.
Problems at the banks forced Spain to ask Europe for 41.3 billion euros (£36.8 billion) in aid to help the weakest in 2012. Most of the savings banks have since disappeared as they were absorbed by rival banks.
Spain’s High Court said the managers were convicted due to actions it said distorted the bank’s accounts and balance sheets and damaged CAM’s image during a period of economic and financial crisis.
The defendants’ lawyers were not immediately available for comment.
In the first quarter of 2011 the bank had reported a profit of around 40 million euros, while Spain’s banking rescue fund FROB, which has been reviewing how the lenders were managed, said the bank booked losses of close to 1.2 billion euros in the first half, according to the ruling.
The FROB and Spain’s deposit guarantee fund have spent over 60 billion euros rescuing ailing banks in recent years.
Few Spanish bankers have been prosecuted or investigated over the fallout from the 2008 financial crisis as courts find it hard to pin the blame for the failures on any individuals.
Last February, however, former International Monetary Fund chief Rodrigo Rato was sentenced to four-and-a-half years in prison following a scandal over the widespread misuse of company credit cards during his tenure at lender Bankia <BKIA.MC>.
Probes into failed savings banks in Spain had slowly yielded convictions in the case of one small savings bank, Caixa Penedes, whose office network was eventually bought by Banco Sabadell <SABE.MC>.
(Reporting By Jesús Aguado; editing by Paul E. Day, Greg Mahlich)