Current and Former MPS, Deutsche Bank, Nomura Executives Charged in Italy -- 3rd Update
October 01 2016 - 11:31AM
Dow Jones News
By Giovanni Legorano and Jenny Strasburg
A judge in Milan on Saturday charged 13 former and current
executives at Banca Monte dei Paschi di Siena SpA, Deutsche Bank AG
and Nomura International PLC with a number of alleged financial
crimes, people familiar with the matter said.
The decision by judge Livio Cristofano follows an investigation
lasting more than 1 1/2 years by Milan prosecutors into two complex
financial transactions that Monte dei Paschi arranged with Nomura
and Deutsche Bank, as well as other transactions that allegedly
helped Monte dei Paschi misrepresent its financial situation.
Monte dei Paschi and Nomura spokespeople had no comment. A
Deutsche Bank spokesman said, "We will put forward our defense in
court," declining further comment. Lawyers for the individuals
either declined to comment or didn't respond to requests for
comment.
Deutsche Bank and Nomura are also to be defendants in the
indictment, people familiar with the matter said. According to
Italian law, companies can be charged with a direct liability for
some crimes allegedly committed by their representatives. Monte dei
Paschi requested a plea-bargain agreement in July. The court will
decide this month whether to grant it.
In February, Milan prosecutors said that they were seeking the
indictment of the executives after they said they had found
evidence of the manipulation of Monte dei Paschi's stock and
falsification of its accounting, and some of the executives'
obstruction of the supervisory activity of Italian authorities,
according to court documents seen by The Wall Street Journal.
In particular, in requesting the indictment of the bank's
managers, prosecutors alleged Monte dei Paschi's accounting was
false between 2008 and 2012, with the bank's actual earnings being
as much as 88% lower than what it disclosed during that time.
The bank--the world's oldest--has since been bailed out twice by
the Italian government and has struggled to shore up its capital
position and regain profitability. This summer, the Tuscan lender
emerged as the worst capitalized among large European lenders in a
continentwide health check conducted by the European Banking
Authority. It said it would sell all its most toxic bad loans worth
EUR28 billion ($31.5 billion) and raise as much as EUR5 billion in
fresh equity.
However, the bank's board recently ditched both its chairman and
chief executive amid muted investor enthusiasm for the plan, which
has been looking increasingly fragile, people familiar with the
matter said. The bank had started to put the plan into action by
testing investors' interest, but it hasn't made more progress.
The case is one of a raft of legal matters hanging over Deutsche
Bank from years past. Prolonged litigation and regulatory matters
have cost the bank billions of dollars, adding to its woes as a new
chief executive and lineup of senior executives try to cut expenses
and boost profits.
On Saturday, Judge Cristofano sent to trial five former Monte
dei Paschi managers, including ex-chairman Giuseppe Mussari and
ex-general manager Antonio Vigni. The former executives couldn't be
reached for comment. In the past they have denied any wrongdoing. A
lawyer for Mr. Vigni declined to comment. A lawyer for Mr. Mussari
didn't immediately reply to a request for comment.
Former Deutsche Bank executives indicted Saturday include
Michele Faissola, who formerly oversaw rates and commodity trading
in Deutsche Bank's markets business and who was head of asset and
wealth management last year when he left the bank. Mr. Faissola and
a lawyer representing him declined to comment. Mr. Faissola has
denied wrongdoing in the past.
In addition, the Milan judge charged Michele Foresti, a
fixed-income trading executive who left Deutsche Bank in 2014, and
Ivor Dunbar, a former global markets executive. Their lawyers
declined to comment. Mr. Foresti and Mr. Dunbar didn't respond to
requests for comment.
Matteo Vaghi, who also was charged, remains at Deutsche Bank,
working in wealth management. He declined to comment. Mr. Vaghi is
a managing director who previously oversaw the wealth management
unit's U.K. and Southern European operations.
Two other former Deutsche Bank managers and two former Nomura
managers who were charged couldn't be reached for comment.
Write to Giovanni Legorano at giovanni.legorano@wsj.com and
Jenny Strasburg at jenny.strasburg@wsj.com
(END) Dow Jones Newswires
October 01, 2016 11:16 ET (15:16 GMT)
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