Italy sends S&P, Fitch officials to trial over 2011, 2012 cuts
MILAN/TRANI Italy (Reuters) - An Italian court indicted officials from ratings agencies Standard & Poor's and Fitch on Tuesday over accusations of market manipulation related to cuts to Italy's sovereign debt ratings during the euro zone debt crisis in 2011 and 2012.
A court in the small southern city of Trani also indicted the two companies for their legal liability in the case through the actions of their employees. The trial is due to start on Feb. 4, 2015.
The judge ordered five current and former employees of Standard & Poor's and one from Fitch to stand trial over accusations that sensitive reports were released during trading hours, causing heavy losses on stock and bond markets.
S&P said in a statement the allegations were "completely unfounded and unsupported by any evidence".
Fitch added in a separate note that it disagreed with the judge's decision and was confident that the agency and its officials would be exonerated as the proceedings continue.
The investigation initially also included the third major ratings agency, Moody's, but prosecutors later dropped the case against it.
The probe into alleged market manipulation and abuse of privileged information highlighted the widespread frustration felt in Italy over the role of the ratings agencies in responding to the global financial crisis.
Steep ratings downgrades were blamed by many in Italy for undermining confidence in Italy's 2 trillion euro public debt, potentially pushing the country towards the kind of disaster that engulfed Greece.
They included reports in January 2012 by S&P, which cut its rating on Italy's sovereign debt by two notches from A to BBB+, and by Fitch, which cut its rating to A- from A+.
Lawyers for the credit ratings agencies initially questioned the jurisdiction of the court in Trani, which is in the southern region of Puglia, far from the Italian capital Rome or the main financial centre Milan.
But prosecutors successfully argued that since the reports were issued outside Italy, any Italian court had the authority to proceed.
The case started after the Trani prosecutors received a legal complaint from two consumer rights groups that had previously been rejected by magistrates in Milan and Rome.
(Reporting by Giulio Piovaccari; Writing by James Mackenzie; Editing by Catherine Evans)
