Former CEO of Italian regional bank under house arrest

MILAN (AP) — Police have arrested the former CEO of Italian regional lender Veneto Banca and seized millions in cash, shares and property as part of an investigation into an alleged scheme to conceal the bank’s financial problems.

Financial police said Tuesday that prosecutors in Rome are investigating the allegations of market rigging and interfering with regulatory authorities dating from 2013-2014.

The regional lender’s former CEO, Vincenzo Consoli, has been placed under house arrest. Police also searched the homes of 14 others under investigation.

Veneto Banca, based north of Venice, was rescued in June by a private recapitalization fund organized by the government.

Prosecutors are investigating allegations that the bank loaned money to customers so they could buy shares, while concealing the transaction from regulators, in an exercise aimed at making the bank appear more solid than it was. Financial police said inspections by the Bank of Italy and stock market regulator Consob brought the situation to light.

Consoli resigned last year after two decades as CEO.

The bank said in a statement that it was cooperating with authorities. CEO Cristian Carrus said that the bank “is the first to be interested in total clarity on what has happened in the past,” adding that it is the board’s duty “to restore a climate of renewed trust and transparency necessary to continue the relaunch and development of the bank.”

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