Financial crimes prosecutor Grigoris Peponis on Wednesday, July 11, called for additional investigation into the possible involvement of Andreas Papandreou, the brother of former Greek Prime Minister George Papandreou, in transactions involving credit default swaps (CDS) on Greek debt by the Hellenic Postbank at a time when Papandreou served as the country’s premier.
In requesting further investigation of the case, Peponis essentially contradicted the view expressed by the first-instance court prosecutor in charge of the case Aris Koreas.
After an investigation into the affair lasting several months, Koreas came to the conclusion that there was no evidence to substantiate reports that the premier’s brother had been involved in the scandalous financial transactions and that the case should be filed as it would not stand up in court.
Peponis,on the other hand, expressed the view that the case had been led to a ‘legal dead end’ and that further investigation was required, so he requested that Koreas track the entire course of the CDSs traded by the Hellenic Postbank in the autumn of 2009.
Based on the financial prosecutor’s orders, Koreas will have to apply for the assistance of authorities in Switzerland, where the investment firm involved is based, and determine a number of issues, including the precise job title and position occupied by the premier’s brother in the firm during 2009-2010 and the extent of his involvement in taking investment decisions. He will also have to ascertain whether the firm bought CDSs on Greek debt, whether the Hellenic Postbank sold CDS to the firm in question and whether there is any evidence of insider trading in these transactions.
Collecting the evidence demanded by Peponis will require a specialized team of financial auditors to assess and evaluate the evidence and decide on any further course of the case. That, of course, requires a significant time period to be completed.
The second part of Koreas’ investigation concerned complaints of an organized speculative attack against Greece, a general complaint filed by a lawyer and economist in 2010 against all responsible parties.
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