Banca Monte dei Paschi di Siena SpA said Chief Executive Officer Luigi Lovaglio has been notified he is under investigation for alleged market manipulation and obstructing regulators in the bank’s takeover of rival Mediobanca SpA.

Monte Paschi also said it received a search order from Milan prosecutors.

The company is confident in the correctness of its actions and is fully cooperating with authorities, it said in the statement on Thursday, following a media report.

Monte Paschi shares fell as much as 7.1% in Milan trading, and were down 4.1% at 4:35 p.m. local time.

Earlier Thursday Italian daily Il Corriere Della Sera reported Milan prosecutors are investigating Lovaglio and two other individuals — billionaire Francesco Gaetano Caltagirone and Delfin Sarl Chairman Francesco Milleri —

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