Deutsche Bank and Nomura Convicted in Monte dei Paschi Derivative Trial

Published On November 20, 2019

20 November 2019: 13 former bankers from Nomura, Deutsche Bank and Monte dei Paschi have been convicted by an Italian court over derivative deals that helped bring about one of the country’s largest financial scandals.

At the centre of the case is two derivative transactions that Nomura and Deutsche Bank arranged for Monte dei Paschi in 2009. The deals were arranged in such a way that they allowed Monte dei Paschi to hide more than 2 billion euros of losses it had accumulated. At the time, the scandal threatened to destabilise Italy’s financial industry and in 2017 Monte dei Paschi were forced to seek a state bailout of 8 billion.

The trial started in December 2016 and has taken 100 hearings to complete. The 13 defendants faced allegations of false accounting and market manipulation between 2008 and 2012. Managers at Monte dei Paschi were also accused of misleading regulators. Nomura and Deutsche Bank were fined a total of $176 million, while Monte Paschi settled prior to the case.

In total, thirteen people were convicted including Deutsche Bank’s former global head of rates, Michele Faissola, and Sadeq Sayeed, Nomura’s former chief executive for Europe. The heaviest sentence of all – seven years and six months – was handed to Monte Paschi’s former chairman Giuseppe Mussari.