A Milan court has ordered Banca Monte dei Paschi di Siena (BMPS.MI), Nomura (8604.T) and Deutsche Bank (DBKGn.DE) to stand trial for a string of alleged financial crimes, legal sources said on Saturday.
It also indicted 13 former and current managers from the three banks over the case, with prosecutors alleging they used complex derivatives trades to conceal loses at Monte dei Paschi, Italy’s third largest lender, the sources said, adding that the trial will start on Dec. 15.
All those indicted have previously denied any wrongdoing.
The alleged crimes relate to the 2008-2012 period and include market manipulation and obstructing supervisory activity as well as false accounting, the sources said.
The allegations centre on two derivatives transactions, known as Santorini and Alexandria, which Monte Paschi’s former management arranged with Deutsche Bank and Nomura to conceal losses, prosecutors have said.
Since then, Monte dei Paschi has been bailed out by the Italian government and has had to raise billions of euros from investors to stay afloat. The bank is now seeking a further 5 billion euros in capital as part of its latest rescue plan.
Under Italian law, a company can be held responsible if it is deemed that it failed to prevent, or attempted to prevent, a crime by an employee that benefited the company.
Amongst those being sent to trial are Monte Paschi’s ex-chairman Giuseppe Mussari and its ex-general manager Antonio Vigni, as well as six former Deutsche Bank staff and two Nomura employees.
The case also involves a hybrid financial instrument which Monte dei Paschi used to partly fund its disastrous 2007 acquisition of rival bank Antonveneta, when it paid some 9 billion euros for the lender, helping to sink its accounts.