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Four foreign banks convicted in Milan in derivatives case

Milan judge convicts JPMorgan, Deutsche, Depfa, and UBS

19 December, 18:38
Four foreign banks convicted in Milan in derivatives case (UPDATES with fine, background) (ANSA) - Milan, December 19 - Four international banks were found guilty of fraud Wednesday by a Milan judge in a case involving the sale of derivatives to the city of Milan.

Judge Oscar Magi convicted Deutsche Bank, JPMorgan Chase & Co., UBS AG, and Depfa Bank Plc. - which had all denied the charges - ordered the confiscation of 88 million euros.

Magi also found guilty nine current and former bank employees, who received suspended sentences of six months to eight months.

The trial involving the four banks began in May 2010, when the banks stood accused of defrauding the city of Milan by hiding how much they earned on the derivatives. Prosecutors alleged Milan lost 105 million euros as part of the sale of bonds worth 1.69 billion euros between 2005 and 2007.

Prosecutor Alfredo Robledo called Wednesday's decision "historic".

The banks settled with the city of Milan in March in the case involving 1.7 billion euros in bonds sold by the city in 2005.

The banks all issued separate statements say they planned to appeal Wednesday's ruling.

The ruling came on the same day that, in a separate case, the Swiss bank UBS agreed to pay $1.5 billion US in fines to U.S., British and Swiss regulators for attempting to manipulate the Libor inter-bank lending rate.

The fine is more than three times the $450 million US levied last June against the British bank Barclays for similar allegations.