Manipulation charges

Dusseldorf prosecutors charged Stefan Ortseifen, 58, on Wednesday with manipulating share prices by hiding the extent of his bank's exposure to the subprime mortgage market in the United States.

Ortseifen is charged with publishing a press release on July 20, 2007 "in which the economic impact of the international financial market crisis on the bank was misleadingly portrayed too positively," the prosecution said in a statement.

"The accused therefore induced investors to continue buying several IKB (Deutsche Industrie Bank) shares, thus temporarily supporting the share price," the statement said.

Days after IKB's manipulated press release, the bank's actual exposure to the subprime debacle in the United States became clear.

The prosecution also accused the former manger of financial irregularities in connection with a bank-owned building where he lived, including extensive renovation and purchases at the bank's expense.

Ortseifen ran IKB bank, an early casualty of the financial crisis, from 2004 until he resigned in 2007. The entire IKB board has been under investigation, but Ortseifen is the only one who has been charged.

IKB was eventually saved from collapse with a multi-billion-euro injection of cash from the state and then was sold last year to US-based investment fund Lone Star for over 100 million euros.

db/dpa/AP/AFP

Editor: Sean Sinico