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Bankers acquitted in Italy over derivatives scandal

An Italian appeals court on Friday acquitted 13 former top officials from Banca Monte dei Paschi di Siena (BMPS), Deutsche Bank, and Nomura over a long-running derivatives scandal.

Published: 7 May 2022 10:28 CEST
The logo of the Monte dei Paschi di Siena bank is seen on the window of a branch in downtown Rome.
The logo of the Monte dei Paschi di Siena bank is seen on the window of a branch in downtown Rome. Photo: Filippo Monteforte/AFP
“Justice has been served. I’ve always believed in my clients’ innocence,” Giuseppe Iannaccone, lawyer for the Deutsche defendants, told AFP.
 
The Milan court overturned the 2019 convictions for allegedly helping Monte dei Paschi, the oldest bank in the world, hide hundreds of millions of euros in losses between 2008 and 2012, finding no crime had been committed.
 
 
The scandal, concerning false accounting, share manipulation, and obstructing regulators from Consob, Italy’s stock exchange watchdog, rocked BMPS, which has long been deemed a weak link in Italy’s banking system.
 
 
Prosecutors claimed derivatives trades called Santorini and Alexandria were used, in collusion with Germany’s Deutsche Bank and Japan’s Nomura, to hide losses equivalent to two billion euros ($2.2 billion).
 
The bankers, including former BMPS chairman Giuseppe Mussari and ex-chief executive Antonio Vigni, six former employees of Deutsche Bank and two of Nomura, were sentenced to up to seven years jail in the original trial.
 
The Milan court on Friday also ordered the release of about 150 million euros in seized assets from Deutsche Bank and Nomura, according to Italy’s Sole 24 Ore financial daily.
 
 
Deutsche Bank said it welcomed the verdict, while Nomura told AFP it was “pleased”.
 
Founded in Siena in 1472, BMPS has been in deep trouble since the eurozone debt crisis and is now majority-owned by the Italian state following a 2017 bailout.
 
Earlier Friday it reported a first quarter profit of 9.7 million euros, down 92 percent from the same period in 2021.

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CRIME

Italy has most recovery fund fraud cases in EU, report finds

Italy is conducting more investigations into alleged fraud of funds from the EU post-Covid fund and has higher estimated losses than any other country, the European Public Prosecutor's Office (EPPO) said.

Published: 8 April 2024 17:05 CEST
Italy has most recovery fund fraud cases in EU, report finds

The EPPO reportedly placed Italy under special surveillance measures following findings that 179 out of a total of 206 investigations into alleged fraud of funds through the NextGenerationEU programme were in Italy, news agency Ansa reported.

Overall, Italy also had the highest amount of estimated damage to the EU budget related to active investigations into alleged fraud and financial wrongdoing of all types, the EPPO said in its annual report published on Friday.

The findings were published after a major international police investigation into fraud of EU recovery funds on Thursday, in which police seized 600 million euros’ worth of assets, including luxury villas and supercars, in northern Italy.

The European Union’s Recovery and Resilience Facility, established to help countries bounce back from the economic blow dealt by the Covid pandemic, is worth more than 800 billion euros, financed in large part through common EU borrowing.

READ ALSO: ‘It would be a disaster’: Is Italy at risk of losing EU recovery funds?

Italy has been the largest beneficiary, awarded 194.4 billion euros through a combination of grants and loans – but there have long been warnings from law enforcement that Covid recovery funding would be targeted by organised crime groups.

2023 was reportedly the first year in which EU financial bodies had conducted audits into the use of funds under the NextGenerationEU program, of which the Recovery Fund is part.

The EPPO said that there were a total of 618 active investigations into alleged fraud cases in Italy at the end of 2023, worth 7.38 billion euros, including 5.22 billion euros from VAT fraud alone.

At the end of 2023, the EPPO had a total of 1,927 investigations open, with an overall estimated damage to the EU budget of 19.2 billion euros.

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