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Scandal-hit MPS on another bourse roller-coaster

Over 15% of share capital swaps hands in up-and-down trading

06 March, 19:11
Scandal-hit MPS on another bourse roller-coaster (ANSA) - Milan, March 6 - Some 15.5% of the share capital of troubled Italian bank Monte dei Paschi di Siena (MPS) changed hands in another roller-coaster ride of unusually high volumes on the Milan bourse Thursday.

The stock posted an 11.7% rise before plummeting to a 4.5% loss and ending the day on 1.77% up, a day after a 20% gain with 11.86% of shares traded.

Analysts suggested interest in MPS stock was heightened by reports the foundation that owns about one third of its shares has sold a stake to a foreign investment fund, Bloomberg reported.

Trading was frozen at one point for the second day running due to volatility in the stock, which closed at 0.21 euro cents.

On Wednesday bourse watchdog CONSOB opened a probe into the stock's movements.

Fondazione Monte dei Paschi di Siena wants to sell some shares to raise funds and is said to be in advanced talks with foreign investors.

On Wednesday finance police expanded their investigation into what is now believed to be a 90-million-euro fraud at MPS, including new searches in several cities including Siena, Rome, and Milan. The latest searches are part of a broader probe targeting alleged members of the so-called "5% gang" - a name given to ex-bank managers suspected of taking 5% payoffs on banking operations under a previous management.

Investigators believe the fraud occurred between January and October 2013.

Prosecutors say they hope to eventually bring charges of aggravated criminal conspiracy aimed at defrauding the Sienese bank. The case involves funds transferred to offshore accounts, trusts and companies, and investigators are reaching out as far as San Marino, Switzerland, Great Britain and Singapore as they search for suspicious international transactions.

The Siena prosecutor's office has placed 11 former MPS managers and financial brokers under investigation in the case, including Gianluca Baldassarri, former chief of finance for MPS.

They are also probing Baldassarri's former deputy, Alessandro Toccafondi, the former head of the MPS London office Matteo Pontone, and former MPS manager Antonio Pantalena.

Italy's third-largest bank was thrown into crisis in January 2013 when it emerged that a shady series of derivative and structured-finance deals produced losses of 720 million euros.

Meanwhile, the investigating judge of the court of Siena announced Wednesday the file has been closed into the suicide of David Rossi, the bank's communication manager who threw himself from a window in March 2013.