Published by Global Banking & Finance Review®
Posted on June 6, 2025
3 min readLast updated: January 23, 2026
Add as preferred source on GoogleFour ex-Monte Paschi executives face trial for false accounting of loans. The case impacts the bank's 2017 bailout, with trials set in Milan.
MILAN (Reuters) -An Italian judge has ordered four former executives of bank Monte dei Paschi di Siena to stand trial for alleged false accounting in 2015 and the first half of 2016 over the classification of impaired loans, judicial and legal sources said on Friday.
Former presidents Alessandro Profumo and Massimo Tononi, former CEO Fabrizio Viola, and ex-accounting manager Arturo Betunio are set to face charges of false accounting and market manipulation at a Milan court on Oct. 16.
Lawyers for the four did not immediately respond to requests for comment, but all have consistently denied wrongdoing.
The case marks the latest development in a series of legal proceedings linked to the troubled Tuscan lender’s 2017 rescue.
Milan prosecutors have alleged that false accounting from 2014 to 2017 was used to obscure the bank's insolvency, which would have blocked its state bailout, according to judicial documents.
Milan judge Fiammetta Modica on Friday cleared five other MPS executives, including former presidents Alessandro Falciai and Stefania Bariatti, and former CEO Marco Morelli, of all charges related to the other years under investigations.
Prosecutors had previously requested no proceedings for these periods.
The alleged offence relates to the misclassification of loans as "performing" rather than "impaired".
Italy pumped 5.4 billion euros ($6.15 billion) into MPS in 2017 under a so-called precautionary recapitalisation. Under European Union rules, this applies only to viable companies, so that public money is not used to cover any actual or expected losses.
The European Central Bank conducted a health check on MPS at the time to unlock state aid in compliance with EU competition rules.
Italy's Treasury negotiated the bailout terms with the European Commission and eventually committed to reducing its stake in the bank, which after the bailout stood at 68%.
Under CEO Luigi Lovaglio, the bank has restructured, benefiting from higher interest rates and lower costs. Lovaglio raised 2.5 billion euros in late 2022 to fund redundancies.
In October 2023 Italy's Supreme Court confirmed an appeals court's ruling that overturned a previous verdict and acquitted all defendants of charges related to derivatives deals that prosecutors alleged had helped MPS hide losses.
In December 2023, MPS's former CEO and chairman were also acquitted on appeal, after serving six years in prison in a related case. The verdict was upheld by Italy's Supreme Court in February 2025.
($1 = 0.8776 euros)
(Reporting by Emilio Parodi, editing by Giselda Vagnoni and Louise Heavens)
The four former executives are facing charges of false accounting and market manipulation related to the misclassification of loans.
Milan prosecutors allege that false accounting was used to obscure the bank's insolvency, which would have blocked its state bailout.
Five other MPS executives were cleared of all charges related to the same case by Milan judge Fiammetta Modica.
Italy injected 5.4 billion euros ($6.15 billion) into Monte Paschi in 2017 under a precautionary recapitalisation.
In October 2023, Italy's Supreme Court confirmed the acquittal of all defendants in a related derivatives case, and in December 2023, the former CEO and chairman were also acquitted on appeal.
Explore more articles in the Finance category
