Milan Prosecutor Said to Seek Deutsche Bank, MPS Indictments

  • Former Nomura executives also accused in separate transaction
  • Prosecutors seek charges related to four separate transactions

Milan prosecutors are seeking charges against executives of Deutsche Bank AG and Nomura Holdings Inc. for allegedly colluding with ex-managers of Banca Monte dei Paschi di Siena SpA to falsify its accounts, manipulate the market and obstruct authorities, said people with knowledge of the matter.

The request was filed in a Milan court Tuesday, said the people, who asked not to be identified because the matter is private. Prosecutors last month completed an investigation into two separate derivative contracts arranged with Deutsche Bank and Nomura, as well as on two financings dubbed FRESH and Chianti Classico.

The document names five former managers of Monte Paschi,  six former and current Deutsche Bank executives, an ex-chief executive officer of Nomura International and another manager of Nomura at that time, according to the people. The three banks were also named as defendants in the indictment request, according to the people.

A spokesman for Monte Paschi declined to comment, while officials for Deutsche Bank and Nomura didn’t have an immediate comment. A judge will now schedule a preliminary hearing on the matter.

Prosecutors have been investigating how Monte Paschi’s former managers misrepresented the lender’s finances in the years before it sought a government bailout. The Italian lender used derivative transactions to mask losses and was later forced to restate its accounts when Bloomberg first revealed the trades in 2013.

The investigation revealed Monte Paschi arranged the transactions to hide losses that led to false accounting between 2008 and 2012, according to a prosecutor’s statement on Jan. 14, when they completed the investigation. The world’s oldest bank has since been forced to tap investors to replenish capital amid a slump in shares and rising bad loans and is now seeking a buyer to help restore profit.

Italian news agency Ansa earlier reported the indictment request.

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