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Italy orders seizure of 1.8BN euro from Nomura

Tuesday - 4/16/2013, 1:31pm  ET

COLLEEN BARRY
AP Business Writer

MILAN (AP) -- Italian authorities on Tuesday ordered the seizure of 1.8 billion euro from Japan's Nomura bank and placed its former European CEO under investigation as part of its probe into the trading scandal at Monte Paschi di Siena bank.

Siena prosecutors accused Nomura's retired Europe chief, Sadeq Sayeed, and Raffaele Ricci, a managing director for fixed income sales of obstructing regulatory authorities.

Nomura denied any wrongdoing and said that, so far, none of its assets had been seized.

"We will take all appropriate steps to protect our position and will vigorously contest any suggestions of wrongdoing in this matter," Nomura said in a statement.

MontePaschi, as the bank is commonly known, has acknowledged losses of 730 million euros due to three derivative trades that were not reported on balance sheets or to regulators until new management came in last year. The bank has sought 4 billion euros in state aid mostly as a cushion against Italian sovereign debt exposure, but raised it by an additional 500 million euros after the trading losses became clear.

The Nomura trade, dubbed "Alexandria," involves the purchase by Monte Paschi of 3 billion euros ($3.94 billion) in Italian government bonds using a loan from the Japanese bank. The proceeds were then used in a risky derivatives deal.

Prosecutors said the seizure order included 88 million euros in commissions pocketed by Nomura and 1.7 billion euros Monte Paschi di Siena deposited with the bank as collateral for the deal.

The seizure of assets from former bank officials was also ordered by prosecutors Tuesday: 2.3 million euros from former chairman Giuseppe Mussari and 9.9 million euros from general manager Antonio Vigni and 2.2 million euros from finance chief Gianluca Baldassarri.

Baldassarri was taken into custody as a flight risk after trying to cash in securities valued at 1 million euros, but was released last month.

MontePaschi, the world's oldest running bank, has said it would sue Mussari and Vigni, along with Nomura and Deutsche Bank, over the two costliest trades in the scandal.


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