“The context of the global financial crisis in which Madame Lagarde found herself in should be taken into account,” said Martine Ract Madoux, the main judge, in explaining the absence of any sentence.
She also cited Lagarde’s good reputation and international standing as reasons why the court did not hand down a punishment in a case that could have carried a sentence of up to a year in prison.
In their ruling, the judges did not see negligence in Lagarde’s decision to seek an out-of-court settlement with tycoon Bernard Tapie, but they said her failure to contest the award to him of €400-million was negligent, and led to a misuse of public funds.
Lagarde’s lawyer said immediately after the ruling that his team would look into appealing the decision.
The ruling risks triggering a new leadership crisis at the IMF after Lagarde’s predecessor, Dominique Strauss Khan, resigned in 2011 over a sex assault scandal.
The Washington-based institution’s executive board was expected to meet shortly to consider the implications of the verdict, IMF spokesperson Gerry Rice said.