Open

Coming up

Don't miss

Replay


LATEST SHOWS

AFRICA NEWS

Ebola virus: US health institute says cases could top 1.4 million by January

Read more

MEDIAWATCH

New "cuddles-only" dating app hits the market

Read more

DEBATE

Strikes Over Syria (part 2)

Read more

MEDIAWATCH

Is somthing a-brewing in Britain since Scottish referendum?

Read more

DEBATE

Strikes Over Syria

Read more

ENCORE!

30 years of Americana through Jean-Pierre Laffont's lens

Read more

FOCUS

A little bit of Africa in Paris

Read more

AFRICA NEWS

Frenchman kidnapped in Algeria: 'IS'-linked jihadists claim abduction of 55-year-old tourist

Read more

TALKING EUROPE

EU budget deficits: Time to be more flexible?

Read more

Business

Four banking giants charged with derivative fraud in Italy

Text by News Wires

Latest update : 2010-03-17

UBS, Deutsche Bank, Germany's Depfa and JPMorgan Chase & Co were charged with aggravated fraud linked to the sale of derivatives. The judge also ordered 13 bank officials and former Milan city employees to stand trial.

REUTERS - An Italian judge has ordered four foreign banks to stand trial for aggravated fraud stemming from a 2005 derivatives swap for a 1.68 billion euro ($2.32 billion) bond issued by Milan, legal sources said.

UBS, Deutsche Bank, Germany's Depfa and JPMorgan Chase & Co have been ordered to stand trial in a test case for billions of euros in derivatives taken on by Italian cities nationwide.

The judge also ordered 13 bank officials and former Milan city employees to stand trial on the same charges, the legal sources said.

JPMorgan and UBS had no immediate comment. Deutsche Bank and Depfa were not immediately available to comment.

Milan, Italy's financial and fashion capital, says it faces a 100 million euro loss on the deal, the biggest bond issue by an Italian city.
Milan is also suing the banks in the civil courts for 239 million euros in total liabilities.

Milan is the most prominent Italian city among hundreds that raced to sign up for derivatives contracts in an attempt to cut interest costs on their debts.

Almost 500 small and large Italian cities are facing mark-to-market losses of 2.5 billion euros on the contracts, according to the Bank of Italy. Analysts say that figure will balloon when interest rates go up.

Italy's central bank put the notional value of derivatives contracts at 24.1 billion euros in June 2009.

In the southern region of Puglia, prosecutors also are seeking to bar Merrill Lynch, a unit of Bank of America Corp, from government contracts for two years. The move stems from derivatives losses from 870 million euros in regional bonds.

 

Date created : 2010-03-17

COMMENT(S)