A court in Siena Friday
sentenced Giuseppe Mussari, the former chairman of troubled bank
Monte dei Paschi di Siena (MPS), to three years and six months
in prison for misleading financial system regulators.
The same sentence was passed for MPS former general manager
Antonio Vigni, whose lawyer said he will appeal, and former
chief of finance Gianluca Baldassarri.
All three were accused of giving false statements to
regulators in relation to the purchase of the smaller
Antonveneta bank in 2008 and derivatives trades which
prosecutors said were made to conceal losses.
Prosecutors said the trio deliberately hindered the work of
banking supervisors from the Bank of Italy by hiding a contract
signed from July 2009 between MPS and Japan's Nomura bank
involving the restructuring of a complicated financial
derivative dubbed Alexandria.
This case has been only one of several challenges facing
MPS, which has been at the centre of numerous crises that have
shaken the foundations of the world's oldest operating bank.
Its woes became public in 2013 when it became known that a
previously undisclosed series of derivative and
structured-finance deals produced losses of around 720 million
euros.
MPS was hit by massive losses besides those related to the
derivatives deal, as well as political furore when the former
Italian government of Mario Monte agreed to a 4.1-billion-euro
bailout plan to cover the bank's capital needs.
More recently, MPS was hit hard this week on financial
markets after stress tests by the European Central Bank found it
had a capital shortfall of 2.1 billion euros.
Troubled MPS raised some five billion euros in new capital
in early summer in order to repay a State bailout and avoid
nationalization, as well we shoring up reserves ahead of the ECB
assessment.
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