Deutsche and Nomura Accused Of Helping To Mask Losses

Pointing The Finger

Banca Monte dei Paschi di Siena SpA has alleged Nomura and Deutsche Bank colluded with former managers to devise two derivatives that hid losses and earned them at least $231m.

The world’s oldest bank said the two firms were aware Monte Paschi’s then managers wanted to hide losses and designed with them two derivatives aimed at achieving that goal, the Italian lender said in a 74-page report to shareholders. Monte Paschi, which last month filed a lawsuit seeking damages from the two lenders and former executives Antonio Vigni and Giuseppe Mussari, said it will seek compensation if a court finds the behavior of Deutsche Bank and Nomura employees to be criminal.

Bloomberg reports that Monte Paschi hid as much as $714.5m of losses from previous years through the two transactions in 2008 and 2009, the lender said. Deutsche Bank earned at least $117.9m from Santorini, a deal first reported by Bloomberg News in January, while Nomura reaped at least $112.8m from its transaction, dubbed Alexandria.

Those deals 'should never have been put together', the Siena, Italy-based lender said in a report released on March 29. Nomura and Deutsche Bank 'were perfectly aware of the context, the illicit objectives' of Monte Paschi’s former executives, the company said.

Hit the link below to access the complete Bloomberg article:

Monte Paschi Says Nomura, Deutsche Bank Helped Mask Losses

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image: © Lisamarie Babik

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