FLORENCE, Italy The Bank of Italy has ordered former top executives of Monte dei Paschi di Siena to pay a total of 5 million euros (4.2 million pounds) for a lack of controls over risky trades at the bank, two sources close to the situation said.
The fines were imposed after the Bank of Italy completed a thorough inquiry into risky dealings that forced the Tuscan bank to book hundreds of millions of euros of additional losses.
"The Bank of Italy has imposed triple legal maximums against the former board of directors, the three (internal) auditors and other top managers, for a total of about 5 million euros," one of the sources said.
Under the law, the maximums can be exceeded in very serious cases and when more than one violation has occurred.
Both the Bank of Italy and Monte dei Paschi declined to comment on the case.
Bank of Italy Governor Ignazio Visco approved the sanctions on March 28, the sources said. Former Chairman Giuseppe Mussari and former director general Antonio Vigni were both fined around 500,000 euros, the sources said, and Gianluca Baldassarri, the former head of the finance division who has been arrested for his role in executing the structured trade, was also fined.
Efforts to reach Mussari and Vigni for comment were not successful, and Baldassarri could not be reached in jail.
Risky derivatives trades at Monte dei Paschi were partly behind huge losses that forced Italy's third biggest lender to take a state bailout last month.
The bank is currently under investigation in Siena for allegedly failing to disclose the true nature of a number of complex derivative trades.
The bank posted last week a wider-than-expected 3.2 billion euro loss last year due to higher loan loss charged and losses on the structured deals.