MILAN (Reuters) ? Italian police seized documents at Fitch's Milan offices on Tuesday as the rating agency was drawn into an investigation of alleged market manipulation already involving its two bigger rivals Standard & Poor's and Moody's (MCO.N).
The investigation follows a raft of sovereign downgrades for debt-laden Italy, the last one by S&P on January 13 -- part of its much-criticized mass downgrade of nine euro zone countries.
Fitch analysts have said they expect to cut their rating on Italy by up to two notches this month.
Financial police seized documents and emails at Fitch's offices, an investigative source said, less than a week after a similar operation at S&P's in Milan.
"Men from the financial police are at Fitch in Milan," Carlo Maria Capristo, chief prosecutor in Trani, told Reuters.
Trani prosecutor Michele Ruggiero, who is leading the investigation and was in Milan for the police operation, declined to comment when asked whether any documents had been seized.
An investigative source said that, after placing S&P and Moody's under investigation last year, the prosecutors had extended their probe to Fitch for alleged market manipulation and abuse of privileged information.
There was no immediate comment from Fitch.
A Fitch employee said: "It doesn't look serious to me."
European policymakers struggling to contain a debt crisis have grown increasingly critical of rating agencies, saying they have been too quick to downgrade indebted EU states despite bailouts and austerity programs.
U.S. authorities also reacted angrily when S&P stripped the United States of its cherished triple-A rating last August.
MARKET LOSSES
The Trani prosecutors began their investigation last year, alleging that reports by Standard & Poor's and Moody's on Italy and its banking system provoked sharp losses on the Milan stock market.
The probe was extended to S&P's decision to downgrade Italy earlier this month, and now to Fitch's threatened ratings cut.
S&P's Milan offices were searched on January 19 and visited again by prosecutor Ruggiero on Tuesday.
Last week's search order for S&P's offices, a copy of which was seen by Reuters, said S&P's downgrade of Italy's sovereign rating on January 13 was based on "untruthful, tendentious, incoherent and unfair" assessments and data.
It also said news of the imminent downgrade was leaked when markets were still open, adding the agencies' actions and reports on Italy caused "real damage to the financial market, with a slump in the share price of banks and/or of public debt."
S&P rejected the allegations.
"S&P did not divulge any of its own ratings decisions on the sovereign debt of European countries before the official release of January 13," it said, adding that none of the agency's controlling shareholders had had access to its data or reports before they were released in the public domain.
It also dismissed as groundless the prosecutors' assertion that its ratings decisions were based on incorrect information.
"The statement that S&P could have a political or economic agenda on Italy or on the euro zone is unfounded," it said.
Moody's has said it takes the dissemination of market sensitive information very seriously and is cooperating with authorities.
The probe in Trani, a small town in southern Italy, was opened after a complaint by two consumer groups over the market impact of S&P and Moody's reports about Italy.
The consumer groups have said they had first contacted prosecutors in Milan and Rome but had been turned down.
Judicial sources said Milan's chief prosecutor, who on Monday put out a statement to say his office was not investigating S&P in relation to its rating assessments, believed there was not enough information to warrant a probe.
An investigative source said the Trani prosecutors hoped to conclude their probe by the end of January.
(Additional reporting by Antonella Ciancio, Stephen Jewkes and Giulio Piovaccari; Writing by Silvia Aloisi; Editing by Jon Loades-Carter and David Cowell)
dukan diet non hodgkin lymphoma lymphoma ciara world trade center memorial world trade center memorial spartacus
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.