FRANKFURT Aug 14 German banker Georg Funke faces the possibility of criminal charges over the 2008 collapse of Hypo Real Estate, his lawyer said on Thursday.
German prosecutors have submitted documents that the court must now review before deciding whether to pursue Funke, who ran the bank until 2008, just before it required a government bailout.
"Charges have been filed," the lawyer, Wolfgang Kreuzer, told Reuters. Funke denies any wrongdoing and will seek an acquittal if the process results in a trial, Kreuzer said.
Earlier this week, Munich prosecutors also sought charges against Deutsche Bank co-CEO Juergen Fitschen and several former executives at the bank in connection with the long-running Kirch bankruptcy case.
Other high-profile German cases have targeted former executives at HSH Nordbank and Landesbank Baden-Württemberg (LBBW). So far, however, such efforts to prosecute financial executives in Germany have resulted in only one conviction in 2010, that of Stefan Ortseifen, former head of bank IKB, for misleading investors.
HRE was the country's largest property lender when it collapsed in one of the most dramatic European episodes of the financial crisis.
As early as 2008, prosecutors began investigating suspicions of insider trading, market manipulation, breach of trust and falsification of accounts.
Kreuzer said only a small number of the suspicions had resulted in a request for charges, but said he had not yet seen the prosecution documents.
A spokesman for the prosecutor declined to comment but said the investigation against eight management board members, which include Funke, had concluded. The court declined to comment.
Germany nationalised the stricken real estate lender in the aftermath of the Lehman Bros bankruptcy for fear a total collapse would set off a chain reaction. Hypo Real Estate received a 10 billion euro capital injection as well as 145 billion euros in liquidity guarantees.
When approving the bailout, the European Commission ordered HRE to sell its public finance unit Depfa in 2014 and its much larger mortgage lender Deutsche Pfandbriefbank (PBB) in 2015.
HRE had been preparing to sell Depfa to U.S. investors but in a surprise move in May, Germany's bank bailout fund Soffin said taxpayers would be better served if it wound down the unit itself. It overruled a recommendation by the HRE board, which had advocated the sale.
Separately on Thursday, HRE said it had mandated U.S. bank Citigroup to advise it on possible solutions for PBB, which could include a sale or an initial public offering. (Reporting by Joern Poltz; writing by Thomas Atkins; editing by Arno Schuetze and Tom Pfeiffer)