With the conclusion of the preliminary hearing in the small prosecutor office in Trani, the process against the rating agencies for market manipulation enters into its active phase.
The preliminary hearing judge Angela Schiralli indicted two managers of the American Fitch and six of the analogous agency S&P. The charge is aggravated by ‘offensive nature’ and the very considerable extent of the damage caused.
“We firmly believe that these allegations are completely unfounded and unsupported by any evidence”, said S&P in its defence.
The investigation was conducted on the exposed groups to protection of consumers and ADUSBEF Consumers Association, by the prosecutor of Trani Michael Ruggiero.
The proceedings were attended by the civil part of ADUSBEF plaintiffs, represented by the lawyer Antonio Tanza, and some investors represented by lawyers Astolfo Di Amato, Alessio Di Amato and Anthony Trimboli.
The next hearing was fixed for the 4th of February.
The preliminary hearing judge will soon make known the decision for managers of S&P, accused of aggravated market manipulation.
There are a total of eight defendants between managers and analysts of the two agencies.
The charges are based on the reports issued between 2011 and 2012 on the reliability of the banking system and on the downgrade of Italy.
For Fitch, the defendants are David Michael Willmoth Riley, head of sovereign ratings of the London office, and the office manager Trevor Pitman, for the administrative liability of legal persons, accused of having re-launched – 10 to 18 January 2012 – ” to cuts to Italy’s sovereign debt ratings, never officially decreed agency Fitch until January 27, 2012,” as disclosing information in open markets that had to remain confidential, realistically capable of causing a significant change in the price of financial instruments”.
Also Fitch can be charged with abuse of ‘provision of work’ because the agency is linked to the Ministry of Economy under a contract for the supply of public ratings in relation to issues of debt securities of the Italian Republic.
Ordered to appear in court are Deven Sharma, president of world S & P Financial Service 2007-23 August 2011; Yann Le Pallec, responsible for Europe-London, and analysts of sovereign debt: Eileen Zhang, Franklin Crawford Gill and Moritz Kraemer.
The sixth defendant, David Pearce, the legal representative of the S&P-London, is alleged with administrative liability. Managers and analysts at S&P are accused of having provided “intentionally” in the financial markets – between May 2011 and January 2012 – four reports containing misleading and distorted information on the Italian creditworthiness and initiatives of rehabilitation and economic recovery adopted by the Italian Government, “to discourage – allegedly – the purchase of securities of Italian public debt, thus downgrading their value.” The last of the four reports is S&P January 13, 2012, the one with which, decreed downgrade of Italy’s rating by two notches (from A to BBB).
Following the comments of the president of ADUSBEF, Elio Lannutti.
The request for trial for executives of Standard & Poor’s and Fitch by the public prosecutor of Trani (prosecutors Michele Ruggiero and judge Angela Schiralli), “is a warning to the European Union paralyzed and blackmailed by lobby banking and financiers who did not intend to regulate the activities of private companies issuing report cards clockwork of sovereign states, dominated by a ‘small-town attorney’ (Trani was called a small town in Oklahoma, in the intercepted conversations August 3, 2011, at 18, 32, between Mary Pierdicchi representative of S&P in Italy and Deven Sharma, president of Standard & Poor’s in New York), which has produced more results of the sovereign states in the EU and resize their bribed their ambitions: it never happened before throughout the globalized world.”
“All of the defendants are accused by the prosecutor of Trani Michele Ruggiero and supported by the excellent work of the Guardia di Finanza, market manipulation is compounded by ‘offensive nature’ (because the offense is committed against the sovereign Italian State) and very considerable financial damage is caused, quantified by the Prosecutor of the Court of Auditors, at the very least of €120 billion.”
“Even today’s hearing began after 13.00, whereas plaintiffs ADUSBEF and a dozen of consumers, credit rating agencies Fitch and Standard & Poor’s, which were not resigned to be processed in Trani, after vain attempts to transfer the process to safer shores, accused yet another setback, apart from suffering the trial before the judge Angela Schiralli, rejecting further spurious exceptions, since that was dismissed on jurisdiction made by the defenders of the six defendants in the preliminary hearing of ‘rating agency Standard & Poor’s accused of market manipulation, which risked to start from scratch the whole process.”
“ADUSBEF calls for the immediate termination of contract between the Ministry of Economy and Fitch for providing credit ratings in relation to issues of debt securities of the Italian Republic, and dismissal of officers of the Treasury, who apparently abused their role in continuing the relationship with the agency, although it had been suspected of having altered the price of financial instruments and the apparent abuse of ‘work performance’.
“Bank of Italy, participating in the hearing as the victim, but for now decided not to bring a civil action, has lost yet another opportunity to emphasize the authority lost and the its equidistance from the global financial cliques, that together with the central bankers have spread disaster and economic ruin on the globalized economy, destroying more than 30 million jobs in August 2007, the beginning of the sub-prime crisis.”