Italy’s central bank is fining former top executives of Banca Monte dei Paschi di Siena SpA about 5 million euros ($6.4 million) for their alleged lack of controls over the lender’s risk management, said a person with knowledge of the matter.
The Bank of Italy based in Rome has completed its inquiry and the findings will be published in its supervisory bulletin once the subjects have been informed, said the person, who declined to be identified because the matter hasn’t been made public. Former Chairman Giuseppe Mussari and former general manager Antonio Vigni were fined about 500,000 euros, while former head of finance Gianluca Baldassarri was fined about 400,000 euros, the person said.
Former managers of Italy’s biggest bank are being probed by Siena prosecutors for a range of alleged crimes including false bookkeeping, market manipulation and regulatory obstruction. Baldassarri was arrested in February and the Siena, Italy-based lender said in a report last week that Vigni and Mussari colluded with securities firms to hide losses with derivative transactions.
Baldassarri’s lawyer didn’t have a comment while lawyers for Vigni and Mussari didn’t immediately return calls to their mobile phones. The fines were first reported today by Italian news agency Ansa.
The Bank of Italy has said that it sought daily liquidity reports from Monte Paschi as early as 2010 as margin calls on one derivative transaction, dubbed Santorini, drained funds. The regulator also said Monte Paschi hid documents, impeding its analysis of the “true nature” of the company’s dealings. It followed up with more probes in 2011 and 2012.
Monte Paschi closed at 17 cents in Milan, down 2.9 percent on the day. The shares have decreased 25 percent this year, giving the company a market value of 1.98 billion euros.