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Monte Paschi's former finance chief held in Italy

Feb 15 2013 Silvia Aloisi, Reuters

Italian police arrested on Thursday the former head of Monte dei Paschi's finance department, who is at the centre of an inquiry into alleged fraud and bribery at Italy's third largest bank. Gianluca Baldassarri is the first person to be arrested in a widening scandal that has rocked the world's oldest bank and stirred up a financial and political storm before parliamentary elections on February 24-25. Prosecutors in the Tuscan city of Siena, where the 540-year-old bank is based, have also submitted a written request to speak to the veteran chairman of Spain's Santander, Emilio Botin, one of Europe's most senior banking figures, a judicial source told Reuters. The prosecutors are investigating Monte dei Paschi's costly acquisition of smaller rival Antonveneta from Santander in 2007 as well as a series of loss-making derivative and structured finance trades dating back to 2006-09. They accuse Baldassarri of helping to mislead regulators over the true nature of a secret derivative

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