A Milan prosecutor completed an investigation into a derivative contract arranged by Nomura Holdings Inc to allegedly hide Banca Monte dei Paschi di Siena SpA losses in its 2009 accounts.
The two banks, former managers of Monte Paschi, an ex-chief executive officer of Nomura International and a current manager at Nomura are suspected of false accounting and market manipulation, prosecutor Francesco Greco said in a statement Friday.
The investigation revealed Monte Paschi used the transaction dubbed Alexandria “to hide more than 300 million euros of losses not reported in its 2009 income statement,” the prosecutor said. Rob Davies, a spokesman for Nomura in London, said the bank had no immediate comment. A spokesman for Monte Paschi didn’t have an immediate comment.
Monte Paschi, the world’s oldest bank, had to restate its accounts in 2013 to reflect a loss that had allegedly been masked by the Nomura transaction and a similar deal with another lender. Monte Paschi, which has been bailed out twice by Italy, is now seeking to plug a 2.1 billion-euro ($2.3 billion) capital gap that emerged in the European Central Bank’s health-check by raising 3 billion euros from investors.
The completion of the Milan investigation may lead prosecutors to seek indictments after notification of the probe’s closing is made to the individuals and banks.