Christine Lagarde, the head of the International Monetary Fund, has been placed under formal investigation in France for her alleged involvement in a long-running fraud case.

Under French law, a formal investigation means prosecutors believe they have serious evidence implicating a suspect in a crime. It does not necessarily lead to charges or a trial.

The case stems from 2008 when Lagarde was finance minister under former French President Nicolas Sarkozy.

Prosecutors believe that Lagarde was negligent in dealing with a case that saw a supporter of Sarkozy -- Bernard Tapie -- awarded a settlement worth 285 million euros plus interest.

The IMF said Wednesday that Lagarde has not been charged and will continue in her role at the organization.

Lagarde is "on her way back to Washington and will, of course, brief the board as soon as possible," the IMF said. "Until then, we have no further comment."

Other French officials and business people have been questioned in the case, including Lagarde's former chief of staff, Stephane Richard, who is now head of the massive telecom group Orange (ORAN).

Last year, Lagarde's home was searched and she was questioned by a French court, but was not placed under formal investigation.

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