JP Morgan’s offices in Milan were searched and records were seized by the Italian tax police in their investigation into suspected fraud at Monte dei Paschi bank.
The records check at the US-lender’s centra Milan office follows the EUR1.95 billion (US$2.54 billion) seizure from Nomura, Japan’s largest broker.
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According to Italian authorities, Monte dei Paschi was brought to the verge of collapse by overpaying for Antonveneta and making bad trades with foreign banks, in deals that were often hidden from regulators and intended to camouflage losses.
JP Morgan assisted Banca Monte dei Paschi di Siena (BMPS.MI) in financing its EUR9 billion purchase in 2007 of rival Antonveneta bank through a EUR1 billion hybrid bond.
JP Morgan is also one of the foreign banks, along with Nomura and Deutsche Bank, that entered into derivatives deals that imposed huge losses on Monte dei Paschi after the Antonveneta deal.
All three foreign banks, however, are reportedly denying wrongdoings.
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By GlobalData
