Monte Paschi to Pay Fine in Plea Bargain Over False Accounting

  • Ex-managers allegedly falsified accounts, manipulated market
  • Judge accepts bank’s plea deal reached with Milan prosecutor

Banca Monte dei Paschi di Siena SpA secured court approval for a plea bargain to resolve a years-long investigation over allegations of falsified accounts and market manipulation.

Monte Paschi’s request for a deal, reached with Milan prosecutors in July, was approved by Judge Livio Cristofano on Friday, a lawyer for the Italian bank said. Under the settlement, Paschi will forfeit 10 million euros ($11 million) and pay a fine of 600,000 euros.

Prosecutors had sought to charge Monte Paschi for masking losses using two separate derivative transactions arranged with Deutsche Bank AG and Nomura Holdings Inc. The investigation revealed that the transactions hid billions in losses that resulted in false accounts between 2008 and 2012, according to a prosecutors’ statement released Jan. 14.

Despite the agreement for Monte Paschi, executives including former Chairman Giuseppe Mussari and ex-General Manager Antonio Vigni still face charges for colluding to falsify accounts and manipulate the market. Deutsche Bank and Nomura as well some current and former managers are also in the prosecutor’s sights. Judge Cristofano said on Oct. 1 that he planned to go ahead with the trial and scheduled the first hearing for Dec. 15.

The international firms are named as defendants in the indictment, as the Italian law provides for a direct liability of legal entities for certain crimes committed by their representatives.

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