The arrival of the police at the central Milan office of the U.S. bank came two days after Italian prosecutors moved to seize as much as €1.95 billion, or $2.55 billion, from Nomura, the largest broker in Japan.
“The tax police are here to acquire documents, and we are handing them over to them,” Giorgio Perroni, a lawyer for the U.S. investment bank, told reporters. JPMorgan has repeatedly denied any wrongdoing, and a person close to the investigation said the U.S. bank was not itself under investigation.
“They have given the documents that were asked for, they are cooperating,” the person said.
JPMorgan helped Monte dei Paschi finance its €9 billion purchase in 2007 of a rival, Banca Antonveneta, through a €1 billion hybrid bond.
JPMorgan 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. Nomura and Deutsche also deny wrongdoing.
The Italian authorities have said 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.
Prosecutors are investigating whether the missteps, which forced the government to bail out the 500-year-old bank with a €4 billion loan, were the result of fraud or kickbacks paid under former Monte dei Paschi management.
Two people involved in the investigation said Thursday that prosecutors in Siena had asked the tax police to visit JPMorgan’s offices in central Milan to seek documents relating to Monte dei Paschi’s acquisition of Antonveneta.
Italy is seeking the help of other European countries to carry out its seizure of cash from Nomura, with assets held in accounts at other banks in Frankfurt and London.
Prosecutors said their goal is to block Monte dei Paschi from losing more money to Nomura in connection with a deal called “Alexandria,” a bet on Italian government bonds that were made more costly by an interest rate swap that became unfavorable when rates fell. Monte dei Paschi has posted losses of €730 million from bad derivatives deals.
Article source: http://www.nytimes.com/2013/04/19/business/global/italian-tax-police-seize-documents-from-jpmorgan-in-milan.html?partner=rss&emc=rss