Deutsche, Nomura sued over alleged use of derivatives to mask losses

Banca Monte dei Paschi di Siena SpA’s largest shareholder has decided to sue two of the Italian bank’s former managers including ex chairman Giuseppe Mussari as well as Nomura and Deutsche Bank over the alleged use of derivatives to mask losses.

Bloomberg News reports that Fondazione Monte dei Paschi di Siena took the decision at a meeting of its council Friday, it said in an e-mailed statement.

The banking foundation will also support Monte Paschi in its lawsuits.

Last month a judge approved the request by Siena prosecutors to try Mussari and two other former managers on charges that they helped hide a document that showed how the world’s oldest bank entered into a derivative deal.

Bloomberg also reports that the official in the Italian region of Piedmont who signed interest-rate swaps with Dexia Crediop SpA and Intesa Sanpaolo SpA didn’t speak English well enough to understand the contracts, according to the region’s documents at a London court hearing.

Piedmont, which says it was wined and dined by the banks, signed swaps to cover its interest-rate exposure on a $2.3bn bond issue in 2006, and hasn’t made payments since January 2012, the two Italian banks said in court documents.

Paschi Main Investor to Sue Nomura, Deutsche Bank, Ex Managers

Piedmont Says Official Signed Swap in Language He Couldn’t Read

image: © Lisamarie Babik

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