Christine Lagarde, managing director of the International Monetary Fund, was found guilty of negligence by a French court today. The long-running trial focused on a payout she authorized to a businessman in 2008, when she was French finance minister. Serving under then-president Nicolas Sarkozy, Lagarde used state funds to compensate executive Bernard Tapie with €403 million ($420 million).
Despite the guilty verdict, the judge decided that Lagarde would not face a fine or jail time.
The case itself is decades old, originating in the 1990s when Tapie had to sell his stake in Adidas because he became a government cabinet minister. In 1993, Tapie sued Credit Lyonnais, a state-owned bank that handled the sale, alleging that he was defrauded because they deliberately undervalued Adidas in the sale. In 2008, Tapie was eventually awarded the compensation after Lagarde was made responsible for the case. Last year, a French court said he wasn’t entitled to the money and had to pay it back.
The Tapie case is controversial because the businessman was a friend of Sarkozy and was bankrupt at the time of the settlement. He had spent six months in prison in 1997 for fixing matches when he was president of a French professional soccer club.
Last year, Lagarde was ordered to stand trial by France’s Court of Justice of the Republic, which hears cases against ministers accused of committing crimes while in office. Lagarde was accused of misusing public funds, rather than corruption, and thus faced up to a year in prison or a fine.
Lagarde wasn’t present for the verdict, having left France for Washington. Lagarde began her second five-year term at the IMF in February. The IMF board, which met today, has backed Lagarde.
Lagarde’s predecessor at the IMF, Dominique Strauss-Kahn, resigned in 2011 when he was accused of sexually assaulting a maid in a New York City hotel. The case was later dropped and a civil suit was settled out of court.
(Updated at 6:40pm ET with the IMF’s statement.)