Milan police detained Gianluca Baldassarri, former finance chief at Banca Monte dei Paschi di Siena SpA, as prosecutors investigated possible crimes related to derivatives trading at Italy’s third-largest bank.
Police detained Baldassarri, 51, today accusing him of obstructing the authorities by hiding a document linked to derivatives transactions in 2009, prosecutor Tito Salerno said in a statement. Baldassarri, the first suspect to be taken into custody during the probe, allegedly sought to sell securities for about 1 million euros ($1.3 million), prompting concern he might flee the country, Salerno said.
Chief Executive Officer Fabrizio Viola is seeking to reassure investors he will succeed with a turnaround plan central to a 3.9 billion-euro taxpayer bailout, as the investigation engulfs former executives. Some lawmakers and consumer groups are opposing the rescue amid accusations of market manipulation, fraud, false accounting and obstruction of regulatory activity tied to derivatives trades during Monte Paschi’s purchase of Banca Antonveneta SpA.
Monte Paschi’s new management, which also includes Chairman Alessandro Profumo, found a document in October that proved the link between an unprofitable derivative dubbed Alexandria and a new one, which should have led the bank to book a loss on the original transaction.
Baldassarri was head of finance when Alexandria and two other derivatives deals were made that contributed to a 730 million-euro hit on its assets. The lender said last week that the impact of Santorini on its 2012 accounts will be 305.2 million euros, while Alexandria will bring losses of 272.5 million euros and Nota Italia 151.7 million euros.
Former Chairman Giuseppe Mussari, who resigned as head of Italy’s banking association in January, will be questioned by prosecutors in Milan tomorrow, according to Il Sole 24 Ore. Mussari is among those under investigation, a person with knowledge of the matter has said.
Italy’s financial police moved to seize about 40 million euros in cash and securities last week as part of the criminal investigations. The assets were seized from trustees and banks as a preemptive step amid allegations of fraud, the police said in a statement, without identifying suspects and where the money was seized.
Monte Paschi fell as much as 1.6 percent in Milan trading today and was down 0.8 percent at 4:10 p.m., giving the bank a market value of 2.76 billion euros. The bank has declined 21 percent since Bloomberg News first published details of the Santorini transaction on Jan. 17.