HAMBURG, Germany, May 28 (Reuters) - Prosecutors are seeking suspended sentences and fines for former directors of bailed-out German lender HSH Nordbank, in the first case of a European bank's entire executive board being tried for actions taken in the run-up to the financial crisis.
Former Chief Executive Dirk Jens Nonnenmacher, former capital markets head Jochen Friedrich and others are on trial for breach of trust and accounting fraud.
Prosecutor Karsten Wegerich summed up the prosecution's case at a Hamburg court on Wednesday, calling for Nonnenmacher to serve a suspended sentence of one year and three months and to pay a fine of 150,000 euros ($204,000).
Nonnenmacher, his predecessor Hans Berger, Friedrich and three other former executives pleaded not guilty in the trial which started in July 2013. They are expected to present their final pleas next week.
For Friedrich, prosecutors are seeking a suspended sentence of one year and 10 months plus a fine of 100,000 euros.
HSH - along with other regional state-owned German lenders known as landesbanks - lost billions of euros on risky investments in the financial crisis, forcing its owners to prop it up with a 3 billion euro capital injection and additional 10 billion euros in loan guarantees.
While policymakers globally have reacted to the crisis with new banking rules aimed at preventing taxpayers from having to again foot billions of euros in bailout bills, few bank executives have suffered court actions.
In Germany by contrast, where the second-biggest lender Commerzbank and four landesbanks were among those taking state aid, the former CEO of corporate lender IKB has been convicted of wrongdoing. He received a 10-month suspended sentence after being found guilty of market manipulation.
A criminal case against former managers of bailed-out LBBW for accounting fraud ended with a settlement in which the court ordered them to make payments to charities.
In the HSH case, the prosecutor said the bank's managers failed to properly account for a deal dubbed "Omega 55" which they struck to make the balance sheet appear stronger ahead of a planned listing on the stock exchange.
In December 2007, as the financial crisis was building, HSH sold 2 billion euros of loans tied to real estate assets to BNP Paribas, at the same time agreeing to buy securities from the French lender - some of them linked to Lehman Brothers, which later collapsed, and others linked to Iceland, which suffered a failure of its banking system.
The deal at the core of the trial proved loss-making from day one. It forced HSH to take initial writedowns of 500 million euros, then seek a bailout in 2008, and eventually led to losses of 52.6 million euros.
$1 = 0.7354 Euros Writing by Arno Schuetze; Editing by Thomas Atkins and David Holmes