Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

Hollande depicted as Hitler

Read more

EYE ON AFRICA

Boko Haram crisis: Militants forced from north eastern Nigerian town

Read more

REPORTERS

Syria: Wresting control of Kobani from IS group

Read more

FRANCE IN FOCUS

A who's who of the 'Bettencourt trial'

Read more

FOCUS

Golan Heights on edge...

Read more

THE BUSINESS INTERVIEW

Eugene Kaspersky: Cyber attacks on critical infrastructure 'just a question of time'

Read more

#THE 51%

Equality in the workplace: Bridging the gender pay gap

Read more

ENCORE!

The culture stars trying to save the world

Read more

#TECH 24

Technology helping visually impaired people

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)