IMF chief found guilty of criminal negligence

IMF chief found guilty of criminal negligence

The head of the International Monetary Fund (IMF) was found guilty of criminal negligence by a French court Monday, but will not face jail time.

Christine Lagarde’s position as IMF managing director could be in jeopardy following the ruling, even though she was just appointed to a second five-year term in February.

Lagarde was found guilty on one charge of criminal negligence, but the judge overseeing the case said there was no need for her to face a prison sentence, according to Bloomberg. Lagarde was facing up to a year in prison, as well as a $16,000 fine.

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The trial centered on a roughly $425 million private settlement Lagarde oversaw between the French government and a French businessman, Bernard Tapie. Lagarde, who was the country’s finance minister at the time, signed off on allowing the settlement to go through private arbitration rather than regular court proceedings, which ultimately led to a significant chunk of public funds being handed over to the tycoon.

Tapie had been embroiled in a dispute with a French bank, Credit Lyonnais. He also was a backer of the country’s then-president, Nicholas Sarkozy.

The IMF Executive Board is expected to meet "shortly to consider the most recent developments," according to a statement provided by a spokesperson.

Lagarde took power at the IMF following a previous scandal at the organization. Previous IMF Chief Dominique Strauss-Kahn stepped down from his post after facing allegations of sexual assault by a hotel cleaner in New York. The criminal case was ultimately dropped by prosecutors, and a civil suit was eventually settled.