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FORMER IMF HEAD CHARGED WITH FRAUD

22 November 2017

A Spanish court has ordered the former head of the International Monetary Fund (IMF) to stand trial for fraud.

Rodrigo Rato, a former Spanish economy minister, is accused of falsifying information over the failed 2011 stock market listing of Bankia, a bank he led which later needed rescuing by the state. It is alleged he misled potential investors so they would buy into its listing.

Rato will stand trial with 30 other former Bankia executives. Bankia itself and its parent company BFA will also go on trial over the failed listing, as will accounting firm Deloitte and one of its employees. Deloitte audited the bank’s accounts.

Tens of thousands of small investors who had converted their savings to Bankia shares lost everything when its near-collapse almost brought down Spain's financial sector.

While Bankia’s fortunes took a turn for the worse, it remains to be seen if this was due to the behaviour of those executives facing trial.

The fact that a company flounders does not necessarily mean that fraud was involved. In the UK the Serious Fraud Office (SFO) would be the agency likely to investigate a Bankia-style situation. And our experience has shown that the SFO can be successfully challenged.

Read our article: DEFENDING SFO ALLEGATIONS