French authorities investigate Natixis over 2007 sub-prime statements

French investment bank Natixis is under investigation from the country’s authorities over statements it put out about sub-prime loans during the height of the global financial crisis in 2007.

The bank said on Wednesday it would be formally investigated by French magistrates for two announcements it made nearly a decade a ago, when the world’s financial system was plunged into chaos.

In 2010, France’s financial watchdog said it was looking into whether the bank had concealed losses it incurred in 2008.

Natixis was created in 2006 from a merger of Banque Populaire and Caisse d’Epargne, two French mutual banks. In November 2007, it said it had taken a €407m hit from the sub-prime crisis which eventually resulted in the collapse of US giant Lehman Brothers a year later.

“As for all banks concerned, this crisis was an unprecedented situation for Natixis and it could not have predicted at the time the full extent, or consequences, of the crisis”, Natixis said in a statement.

It added:

Natixis considers that it provided to the public, in good faith, the information available to it about its exposure, and as and when any underlying risks were identified. In this regard, the investigation only focuses on the information released by Natixis in two announcements in 2007, and does not call into question either prior or subsequent communications.

From now on Natixis will have access to the file containing the allegations against it, and Natixis therefore intends to help the authorities to have a complete understanding of these events, which took place more than 10 years ago.