S&P, Fitch indicted in Italy

On charges of 'aggravated market manipulation'

(ANSA) - Trani, October 28 - Prosecutors in the Puglia city of Trani indicted six managers and analysts from Standard & Poor's and two analysts from Fitch ratings agencies Tuesday on charges of deliberately misleading financial markets with reports on Italy.
    The two agencies have also been indicted in the lawsuit stemming from 2011-2012 reports questioning Italy's creditworthiness and lowering its rating, sources said.
    The reports in question were issued between May 2011 and January 2012, at the height of the eurozone debt crisis when Italy looked to be in danger of a Greek-style financial meltdown.
    They included a report issued on January 13, 2012, in which the United States-based S&P downgraded Italy's sovereign debt rating by two notches from A to BBB+.
    That same day, S&P also lowered its rating on several Italian banks in findings that another employee at the ratings agency disagreed with in an email, seized by authorities and given to Trani prosecutor Michele Ruggiero.
    The defendants are charged with aggravated market manipulation to the detriment of a sovereign State and causing massive economic damage.
    Fitch denied the charges, echoed by S&P who called them "completely unfounded".
    Complaints against S&P were initially raised by a group of 10 consumers and the Italian consumer association Adusbef, now a civil plaintiff in the suit.
    Prosecutors say at least four ratings reports were involved and allege these were deliberately aimed at distorting market opinion on the risks involved in buying Italian bonds as well as the viability of Italian efforts to deal with the crisis that hit sovereign bond markets extremely hard.
    Ratings by the influential international agencies have a significant effect on the cost of borrowing for businesses and government, and also have an impact on the size of government deficit and debt.


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