A logo of a branch of Germany's Deutsche Bank is seen in Cologne, Germany, July 18, 2016.
A logo of a branch of Germany's Deutsche Bank is seen in Cologne, Germany, July 18, 2016. Reuters / Wolfgang Rattay

An Italian appeals court on Friday acquitted all 13 defendants, as well as Deutsche Bank and Nomura, over derivative deals that prosecutors alleged had helped Monte dei Paschi di Siena hide losses in one of Italy's biggest financial scandals.

The verdict, read by lead judge Angela Scalise, overturned a previous ruling in the high-profile case and cancelled seizures imposed on Deutsche Bank and Nomura Holdings Inc for 64.9 million and 88 million euros, respectively.

The appeals court judges ruled there was no case to answer.

Details of the ruling will be published in three months and prosecutors can then decide whether to take the case to the Court of Cassation, Italy's highest court.

Among those cleared on appeal were former Monte dei Paschi Chairman Giuseppe Mussari and former Managing Director Antonio Vigni, who were both sentenced to more than seven years at an initial trial in 2019.

Monte dei Paschi, founded in 1472 and Italy's fourth biggest lender, had reached a settlement with the court over the case in 2016 at a cost of 10.6 million euros ($11.2 million).

The case centred on two complex derivatives transactions -- known as Alexandria and Santorini -- that Nomura and Deutsche Bank arranged for Monte dei Paschi in 2009.


Prosecutors said the deals helped Monte dei Paschi hide more than 2 billion euros of losses racked up after the costly acquisition of a smaller rival in 2008.

"I was always surprised, right from the start, that a trial could be held for the facts surrounding the Santorini and Alexandria derivatives, claiming that they were at the root of the bank's collapse," said Tullio Padovani, who defended Mussari, dismissing them as incidental.

Deutsche Bank issued a brief statement, welcoming the verdict.

The scandal, together with more losses suffered by Monte dei Paschi during the euro zone debt crisis, had threatened to destabilise Italy's financial industry and forced the Siena-based lender to seek an 8 billion euro bailout in 2017.

In the initial trial in 2019 a Milan court convicted all the 13 defendants from the three banks on allegations of false accounting and market manipulation for events that took place between 2008 and 2012.

All defendants have always denied any wrongdoing and none of them was expected to serve time in jail before the lengthy appeals process was exhausted.

An investigation into the accounting of Monte dei Paschi's impaired loans is still open at the Milan Prosecutor's Office.

An appeal is pending for a separate case involving former Monte dei Paschi Chairman Alessandro Profumo, its former Chief Executive Fabrizio Viola and former president of the supervisory board Carlo Salvadori.

They were convicted in 2020 of not correctly booking the two derivative transactions between 2012 and 2015.

($1 = 0.9451 euros)