Insider trading probe for Hypo Real Estate
Troubled German property lender Hypo Real Estate is being investigated for possible insider trading, according to the weekly Der Spiegel to be published Monday.
The report says that prosecutors in Munich had launched an investigation in February after large sales of shares were registered just before the private bank announced a 35 percent drop in assets.
There were also suspicious share movements during a liquidity crisis which hit the bank in the autumn. The Munich-based bank, Germany's biggest victim of the global banking crisis, and its Irish subsidiary Depfa were caught up in a liquidity crunch that worsened after the US investment bank Lehman Brothers declared bankruptcy in September.
It was saved from collapse by a rescue plan worked out by the German government and the country's central bank in October. After a German association of small shareholders filed a complaint, prosecutors in Munich opened an investigation into accusations that HRE directors provided insufficient information on the bank's situation before it required an emergency bailout.
Hypo Real Estate posted a net loss of €3.1 billion in the third quarter, and said a week ago that it expects to report new losses in its fourth quarter and annual results.
In a statement issued on December 20, HRE said it will slash the cost of its workforce by almost half in three years to €600 million and will cut another €500 million by 2013.