Saturday, October 31, 2020

Italian court convicts 13 bank executives from Deutsche Bank, Nomura in Monte Paschi derivative trial

-

Italy took a hard line against bankers involved in helping Banca Monte dei Paschi di Siena SpA falsify its accounts, sentencing 13 executives to jail and fining the firms involved as it seeks to draw a line under one of the country’s biggest financial scandals.

Monte Paschi ex-Chairman Giuseppe Mussari was sentenced to more than 7 years in prison. Former Deutsche Bank officials Michele Faissola and Michele Foresti got sentences of 4 years and 8 months and Dario Schiraldi was given a term of 3 years and 6 months. Nomura’s Sadeq Sayeed and Raffaele Ricci got prison terms of 4 years 8 months and 3 years 5 months respectively. The court also handed down financial penalties and asset seizures totaling about 160 million euros ($176 million) against Deutsche Bank and Nomura.

Monte Paschi’s managers were accused of colluding with Deutsche Bank and Nomura bankers to hide losses at the Italian lender by using complex derivatives trades, dubbed Santorini and Alexandria, that led to a misrepresentation of its finances between 2008 and 2012. Paschi reached a plea-bargain deal in 2016 in one of the highest profile European banking cases in the last decade, first revealed by Bloomberg News.

A spokesman for Monte Paschi declined to comment. Deutsche Bank said it’s disappointed in the ruling and will review the rationale of the verdict once made public. Nomura wasn’t immediately available to comment through an external spokeswoman.

- Advertisement -

All of the 11 suspects from the three banks received prison terms, including Antonio Vigni, Monte Paschi’s former general manager and ex-CFO Daniele Prondini were convicted. The court also convicted two managers for whom the prosecution had called for acquittal.

Prosecutors argued that the complex transaction Deutsche Bank helped put in place in 2008 hid about 430 million euros of losses that Paschi was facing on a previous deal, while Nomura’s derivative hid more than 300 million euros of losses not reported in the bank’s 2009 income statement. While the punishments handed down were tough, there is the chance for the convictions to be appealed.

Both transactions were carried out to cancel previous losses by building up two-leg deals, with one leg granting Monte Paschi an immediate gain and the other loss-making one designed to last for several years in order to pay back the investment banks for the gains realized by Paschi on the first one, according to prosecutors.

Giuseppe Iannaccone, the lawyer defending former Deutsche Bank executives in Monte Paschi case, said in a statement that he’s “shocked” by the ruling and fully convinced of his clients’ innocence.

- Advertisement -

Source: bloomberg

MUST READ

Actress Lori Loughlin begins 2-month prison sentence for role in college admissions scam

Actress Lori Loughlin reported to a federal prison in Northern California on Friday to start a two-month sentence for her role in a massive...

FirstEnergy fires CEO, other executives over Ohio bribery scandal

FirstEnergy Corp. has fired its CEO amid multiple federal investigations related to an Ohio nuclear bailout law passed year. The Akron-based utility company announced in a...

Ukraine’s court strips critical power from anti-corruption agency

Ukraine's Constitutional Court has stripped the country’s anti-corruption agency of some of its critical powers. The high court’s ruling published on October 28 declared it...

Former South Korean President Lee Myung-bak sent back to prison for 17 years in corruption case

Former South Korean president Lee Myung-bak was ordered back to prison on Thursday (Oct 29) as the country's Supreme Court upheld a 17-year jail...

Nigerian court declines to issue international arrest warrant for fugitive ex-Petroleum Minister in corruption case

The Abuja Division of the Federal High Court, on Wednesday, refused an application by the Economic and Financial Crimes Commission, EFCC, for an arrest...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World

Advertisement
Advertisement

Latest News

This Week

Indonesia sentenced stockbroker to life over fraudulent investment scheme

Renowned stockbroker Benny Tjokrosaputro was sentenced to life by the Jakarta Anticorruption Court on Monday evening for his role in a major graft scandal...

Taiwan’s UMC fined $60m for theft of trade secret to help Chinese chipmaker

Taiwan’s UMC has pleaded guilty to trade secret theft in the United States and will pay a $60 million fine in a case where...

Philippines’ President Duterte orders corruption probe across government agencies

Philippine President Rodrigo Duterte said on Tuesday he had ordered the justice ministry to launch a sweeping investigation into graft across all government agencies,...

Two U.S. Navy service members get prison for defrauding military insurance program

Two U.S. Navy service members were sentenced in San Diego federal court Friday for their roles in an insurance fraud scheme that involved making false medical claims to...
Advertisement

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks