Italy Seizes $140M From Nomura In Alleged Sicily Fraud
International Business Times
Published Jul 29, 2014 06:53AM ET
Updated Jul 29, 2014 07:30AM ET
Italy Seizes $140M From Nomura In Alleged Sicily Fraud
By Sneha Shankar - Italy’s police on Monday seized nearly $140 million in cash and property from Nomura Holdings (NYSE:NMR), and accused it of committing fraud in a debt-restructuring deal that it worked on for the Sicilian government.
Local police said that the fraud committed by the Japanese financial services company cost Sicily’s administration a loss of 175 million euros ($235 million). The authorities claimed that the problems began because four Nomura employees used a complex derivatives trade between 2000 and 2006 that did not function as expected, according to Reuters. The authorities are also investigating three more people in the matter, and Nomura has reportedly said that it is reviewing the situation and will cooperate with the authorities in the probe.
Italian regulators seized bank accounts and credit valued at 98 million euros ($131 million) from Nomura along with 6 million euros ($8 million) in property. Sicily’s police also seized assets worth $6.5 million euros from four former Nomura employees and three local consultants, accusing them of trying to conduct fraud while selling complex derivatives to the island's administration to restructure its debt.
Nomura had created three derivatives contracts to restructure Sicily’s debt, causing the administration to lose 60 million euros ($80.60 million), according to Bloomberg. The company has also reportedly been accused of bundling health care debt at “onerous” interest rates in 2002, triggering losses worth another 115 million euros ($154 million) for Sicily. By 2008, Sicily had invested nearly 26.9 billion euros ($36.13 billion) in derivatives, whose nominal value was estimated at 9.8 billion euros ($13.16 billion) in March, according to Bloomberg.
In March, a Milan court flipped an earlier decision to find banks including J P Morgan Chase & Co (NYSE:JPM) and UBS (NYSE:UBS) not guilty of fraud when they sold derivatives to the city of Milan, in a similar case. Many local governments in Italy have taken several international banks to court for losses incurred on complex derivatives, Bloomberg reported.
Last year, Italian prosecutors also seized nearly $2.35 billion from Nomura after Italy’s third-largest bank, Banca Monte Paschi Siena (MILAN:BMPS) or MPS, bought derivatives and accused Nomura’s employees of issuing false statements and of obstructing local regulatory officials from conducting their investigation.
Get The News You Want
Written By: International Business Times
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.