IMF chief Christine Lagarde has been placed under formal investigation by French magistrates on Wednesday for her alleged role in a long-running political fraud case, a source close to the former French finance minister said.
The source said Lagarde, who earlier was questioned by magistrates in Paris under her existing status as a witness, considered their decision to investigate her for alleged "negligence" was unfounded and would appeal it. A French judiciary source also confirmed the step.
Gerry Rice, IMF Communications Director said in a statement e-mailed to CNBC that the Managing Director had already made a statement on the matter. "She is now on her way back to Washington and will, of course,brief the Board as soon as possible. Until then, we have no further comment."
In French law, magistrates place someone under formal investigation when they believe there are indications of wrongdoing, but that does not always lead to a trial.