Central Bank claim JP Morgan broke disclosure rules

Italy Flag

The Bank of Italy told Siena prosecutors that disclosure rules were broken when JP Morgan arranged a $1.3bn exchangeable bond for Banca Monte dei Paschi di Siena SpA in 2008.

Bloomberg News reports that JP Morgan should have informed the central bank the Italian lender had guaranteed it against losing money on the bond sale, the Bank of Italy said in an April 19 letter to prosecutors filed at a Siena court.

The Bank of Italy said it may have withheld approval for the deal had it known about the indemnity.

Monte Paschi received a $5.5bn government bailout earlier this year. The investigation into the fundraising is part of a wider probe by prosecutors into allegations the lender hid losses using derivatives, manipulated markets and obstructed regulators probing its takeover of Banca Antonveneta SpA in 2008.

JP Morgan should have disclosed the indemnity because it could have reduced the total amount raised for Monte Paschi and the relationship could have affected its financial dealings with the Italian lender, according to the central bank.

Hit the link below to access the complete Bloomberg article:

JPMorgan Broke Disclosure Rules Over Paschi: Central Bank

JPMorgan Said to Expect Multiple Fines for Whale Loss

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