Supreme Court Upholds CySEC Fines Against Former Laiki Bank Directors
The long-running legal dispute over Cyprus’s 2014 regulatory penalties against former executives of the now-defunct Cyprus Popular Bank Public Co Ltd (Laiki Bank) has reached its conclusion. The Supreme Constitutional Court of Cyprus, in a ruling issued on October 15, 2025, upheld earlier decisions by the Cyprus Securities and platform Commission (CySEC) and the Administrative Court, confirming administrative fines imposed more than a decade ago on four former members of the bank’s board.
The decision, which dismisses Appeal No. 8/21, concerned Efthimios Mbouloutas, Eleftherios Chiliadakis, Markos Forou, and Panayiotis Kounni—all board members during 2010–2011, a period when the bank’s disclosures and fundraising activities came under scrutiny.
Origins of the Case
CySEC’s original ruling, dated April 28, 2014, followed an investigation into the accuracy of Laiki public financial statements and prospectuses in the years leading up to Cyprus’s 2013 financial crisis. The regulator found that the directors had violated two key pieces of legislation:
- The Transparency Requirements Law, which mandates realityful and complete financial reporting by listed companies; and
- The Public Offer and Prospectus Law, which governs the accuracy of investment prospectuses used to raise capital from the public.
CySEC determined that the bank’s half-year and annual reports for 2010 and four prospectuses issued between May 2010 and May 2011 contained misleading or incomplete information regarding the bank’s financial condition. Those prospectuses were central to capital-raising efforts that drew funds from both at a time when the bank’s balance sheet was already deteriorating.
Although the regulator approved the prospectuses at the time of issuance, it later concluded that this approval did not absolve the signatories of their individual legal responsibility. Fines were therefore imposed on the four directors, with Mr. Forou fined for a narrower scope as he had not signed all the documents in question.
The four former board members challenged CySEC’s , alleging procedural unfairness and claiming that the regulator’s president had shown bias during the investigation. However, on November 30, 2020, the Administrative Court rejected those arguments and upheld the 2014 CySEC decision in full.
In its judgment, the court found that the appellants failed to substantiate claims of partiality or prejudice and confirmed that CySEC had acted within its legal authority in imposing the fines. It further ruled that directors who sign official reports and prospectuses are personally accountable for their content, even when such documents .
Final Appeal Rejected
Undeterred, the former executives filed a further appeal to the Supreme Constitutional Court in 2021. That appeal—registered as No. 8/21—was finally decided on October 15, 2025, with the country’s highest court siding once again with the regulator.
In its brief but decisive ruling, the Supreme and confirmed that the Administrative Court’s reasoning and conclusions were sound. It agreed that allegations of bias were unproven and reiterated the principle that regulatory approval of a prospectus does not exempt those who sign it from their statutory duties to ensure its accuracy.
“The conclusions of the first-instance court… were correct,” the Supreme Court stated, according to the CySEC notice published this week. With this decision, the judicial process surrounding CySEC’s 2014 action against the former Laiki Bank board has now been fully exhausted.
Laiki Bank, once the island’s second-largest lender, collapsed in 2013 amid the Eurozone debt crisis and heavy losses on Greek government bonds. The bank’s failure triggered the unprecedented “bail-in” of uninsured depositors and became a central symbol of the country’s banking-sector collapse.
CySEC said it welcomed the Supreme Court’s confirmation of its 2014 decision, describing it as a reaffirmation of the Commission’s mandate to ensure transparency and investor protection in Cyprus’s capital markets.
