(Adds comment from lawmaker)
July 3 (Reuters) - Cyprus’s securities regulator on Friday imposed a 650,000 euro ($730,800) fine on Germany’s Commerzbank for its role in transactions carried out by a local bank that collapsed during the country’s 2013 financial crisis.
The country’s CySEC commission said Commerzbank had been sanctioned over investment operations conducted by the now-defunct Laiki - also known as Cyprus Popular Bank - in 2011, following Laiki’s merger with Greece’s Marfin-Egnatia Bank.
Commerzbank declined to comment on the case, which followed an eight-year probe by Cypriot authorities.
The investigation, which was launched following calls by left-wing AKEL lawmaker Irene Charalambides, looked into whether the Cypriot deals may have broken laws prohibiting a company from buying its own stock.
CySEC said Laiki invested in two structured products issued by Commerzbank in 2008. Marfin-Egnatia, which was at that time a Laiki subsidiary, was an index sponsor responsible for the composition of the portfolio.
As a result of the 2011 merger between Laiki and Marfin-Egnatia, Laiki became the index sponsor, creating a conflict of interest, CySEC said.
It said Laiki and Commerzbank acted in “concert” to manipulate the market in relation to Laiki shares on several occasions in April and May 2011.
CySEC said it had not fined Laiki because it is in administration and did not want to put an additional burden on former depositors, bond holders and shareholders.
Laiki, once Cyprus’s second-largest bank, was taken into administration and wound down under terms of a 10 billion euro ($13.56 billion) international financial assistance package to Cyprus in March 2013.
Some 4.3 billion euros in uninsured deposits exceeding the EU threshold of 100,000 were wiped out, and thousands of people lost their life savings.
Charalambides said she felt vindicated by the result of the investigation.
“The resolution authority should consider the possibility of civil lawsuits against Commerzbank to ensure that the funds channelled to these structured bonds, with the objective of manipulating shares, be returned, and given to depositors whose funds were subjected to a haircut,” she said in a statement. ($1 = 0.8894 euros) (Reporting By Michele Kambas; additional reporting by Tom Sims in Frankfurt Editing by Marguerita Choy and Helen Popper)