The probe, opened at the request of journalist Lato Lapsa about a possible violation in the failure to register a Rado watch accepted as a gift, established that Vike-Freiberga had not received the watch from the Rado and Zeneva (Geneva) shop as was claimed in an advertisement published on Dec. 9, 2000, in the Diena Saturday supplement, "Sestdiena."
Diena later retracted the ad, saying it was misleading.
The prosecutor's office said the watch had been presented to Vike-Freiberga by the newspaper Chas for being named the paper's "Person of the Year".
It was given to her during a meeting with representatives from Russian-language newspapers published in Latvia.
The watch has also been entered in the list of gifts given to the president. During the probe both the prosecutor's office and the State Auditor's Office discovered that government regulations about gift registration were inadequate.
Prosecutor General Janis Maizitis will soon suggest preparing a new version of the gift registration regulations.
Lapsa is the editor of a popular magazine for men in Latvia, Klubs, which reported in March that Vike-Freiberga had accepted an expensive Swiss watch as a gift, but that the watch was not officially listed among gifts she had received that had a value of over 50 lats ($82).