(Recasts with new arrest order)
FLORENCE, Italy, March 17 An Italian judge on
Sunday ordered the former head of Monte dei Paschi's
finance department to return to jail a day after releasing him
for a procedural error as part of an inquiry into alleged fraud
and bribery at Italy's third-largest bank.
Judicial sources with direct knowledge of the case said
Baldassarri, who had been released on Saturday night, would be
detained in Milan.
Gianluca Baldassarri was the first person to be arrested in
a widening scandal that has rocked the word's oldest bank.
On Saturday, a judge in Siena accepted a request from his
lawyers to have the former executive released as a result of a
procedural error related to his arrest on Feb. 14.
Prosecutors had appealed against the decision saying
Baldassarri may interfere with the case and leave the country.
State 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, who left Monte dei Paschi in 2012,
of helping to mislead regulators over the true nature of a
secret derivatives contract that was found in a safe by the
bank's new management in October 2012.
That accusation has been extended to the bank's former
Chairman Giuseppe Mussari and its former Director General
Antonio Vigni, who were both under investigation for other
alleged offences in the case.
Baldassarri's lawyer, Filippo Dinacci, said his client, who
was questioned by prosecutors on Saturday, had no intention of
leaving the country and was willing to cooperate with
Italian financial police on March 5 searched premises
connected with Monte dei Paschi di Siena as part of a new
investigation into suspected insider trading.
(Reporting by Silvia Ognibene; Writing by Antonella Ciancio;
Editing by Daniel Magnowski, Bernard Orr)