MILAN (Reuters) - A board member at Italy's troubled lender Monte dei Paschi di Siena is being investigated over allegations of breaking insider trading rules and has been suspended, a judicial source said on Wednesday.

Prosecutors in Siena allege that the board member, Michele Briamonte, leaked to the press the content of a board meeting during which it was decided to seek damages from two former executives as well as investment banks Nomura and Deutsche Bank over losses on financial derivatives contracts, the source said.

Lawyers for Briamonte said in an e-mailed statement the allegations against their client were groundless and the measures taken against him wrongful.

The judicial source said Briamonte would be initially suspended from his functions for two months, but the measure could be prolonged.

No comment was immediately available from the bank.

(Reporting By Silvia Ognibene and Silvia Aloisi; Editing by Greg Mahlich)

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