JPMorgan Accused by Siena Prosecutors in Monte Paschi Probe
By Sergio Di Pasquale, Sonia Sirletti & Elisa Martinuzzi – Jul 31, 2013 8:31 AM ET
Siena prosecutors accused JPMorgan Chase & Co. (JPM) and at least one of its employees of obstructing regulators as part of a wider probe into Banca Monte dei Paschi di Siena SpA’s purchase of Banca Antonveneta SpA.
Prosecutors allege JPMorgan employees withheld information from regulators about a 1 billion-euro ($1.3 billion) financing the New York-based bank arranged for Monte Paschi’s takeover of Antonveneta in 2008, according to a July 30 court filing obtained by Bloomberg News. JPMorgan failed to oversee its employees properly, according to the filing, which didn’t identify any of them by name.
A logo sits on a sign outside Banca Monte dei Paschi di Siena SpA’s administrative offices in Siena. Photographer: Alessia Pierdomenico/Bloomberg
The documents mark the final stage before the authorities can request formal indictments, and it brings them a step closer to reconstructing how Monte Paschi’s former managers allegedly colluded to misrepresent the lender’s finances in the years before it sought a government bailout.
Prosecutors also accused former Monte Paschi bankers, including former chairman Giuseppe Mussari, General Manager Antonio Vigni, of obstructing regulators as well as market manipulation and falsifying market filings, according to the filing. Ex-Chief Financial Officer Marco Morelli, now head of Bank of America Corp. in Italy, was also accused of obstructing regulators.
JPMorgan said in a statement that the bank and its employees acted correctly, and it will “vigorously” defend itself. Morelli and his lawyer Riccardo Olivo didn’t immediately return calls for comment. Enrico De Martino, a lawyer for Vigni, and Fabio Pisillo, Mussari’s lawyer, didn’t immediately answer calls.
Monte Paschi bought its Italian competitor from Banco Santander SA (SAN) in 2008 for 9 billion euros, 36 percent more than what the Spanish lender paid for the Padua, Italy-based bank two months earlier.
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