BPCE_PILLAR_III_2017

LEGAL RISKS Legal and arbitration proceedings – Natixis

EDA – Selcodis On June 18, 2013, through two separate complaints, Selcodis and EDA brought proceedings before the Commercial Court of Paris against Compagnie Européenne de Garanties et Cautions for the sudden terminationof commercial relations following the refusal by the latter to grant EDA aguarantee. Through two new complaints filed on November 20, 2013, Selcodis and EDA also brought claims before the Commercial Court of Paris against Natixis, BRED and CEGC for unlawful agreements, alleging that such actions led to the refusal by CEGC to grant a guaranteeto EDA and to the termination of various loansby BRED.

Selcodis is asking for compensation for the losses purportedly suffered as a result of the court-ordered liquidation of its EDA subsidiary, and is requesting that the defendants be ordered to pay damagesand interest,which it assessesto be € 32 million.For its part, EDA is requesting that the defendants be ordered to bear the asset shortfall in its entirety, with its amount being calculated by the court-appointed receiver. Natixis and CEGC consider all of these claims to be unfounded. These two cases (EDA – SELCODIS) are ongoing.

MPS Foundation

In June 2014, MPS Foundation (FondazioneMontedei Paschidi Siena),

claimed by MPS Foundation against the banks and former directors

an Italian foundation, filed a claim against 11 banks, including amount to € 285 million. Natixis, which granted it financing in 2011 at the request of its previousofficers, on the grounds that the financingthus grantedwas in violation of its bylaws, which state that MPS Foundation cannot hold debt exceeding 20% of its total balance sheet. The damages

Natixis considersthese accusationsto be unfounded. Following an objection as to jurisdiction, the Tribunal of Siena referred the case to the Tribunal of Florence on February 23, 2016. The case is stillin progress beforethe Tribunal of Florence.

Formula funds Following an inspection by the AMF (French Financial Markets Authority) in February 2015 on Natixis Asset Management’s compliance with its professional obligations, particularly the managementof its formula funds, the AMF’s EnforcementCommittee delivered its decision on July 25, 2017, issuing a warning and a fine of € 35 million. The Enforcement Committee found a number of failings concerning the redemption fees charged to funds and structuringmargins. Société Wallonnedu Logement On May 17, 2013, Société Wallonne du Logement (SWL) filed a complaint against Natixis before the Charleroi Commercial Court (Belgium), contesting the legality of a swap agreement entered into between SWL and Natixis in March 2006 and requesting that it be annulled. All of SWL’s claims were dismissed in a ruling by the Charleroi Commercial Court on November 28, 2014. SWL appealed this ruling to the Mons Court of Appeal on March 2, 2015. On September 12, 2016, the Mons Court of Appeal annulled the contested swap agreementand ordered Natixis to repay to SWL the amounts paid by SWL as part of the swap agreement,less any amountspaid by Natixis

Natixis Asset Management is mounting a rigorous defense against this decision and has filed an appeal with the French Council of State. In addition, UFC-QUE CHOISIR, in its capacity as a consumer rights non-profit, brought claims before the Paris Disstrict Court (Tribunal de Grande Instance de Paris) on March 5, 2018, against the asset management company to obtain compensation for the financial losses suffered by the holders of the formula funds inquestion.

to SWL under the same agreement and taking into account any amounts that would have been paid had the previous swap agreementnot beenterminated. Natixis submittedan appeal to the Court of Cassationon January 2017. Furthermore,on March 16, 2017 Natixisfiled an appeal with the Paris Court of Appeal challengingthe appeal ruling’s legal enforceabilityin France, and on August 3, 2017 Natixis summoned the Walloon regional authorityto appear before the Namur Court of First Instance regarding the appeal of its performance bond as part of the aforementioned swap agreement.

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Risk Report Pillar III 2017