Milan - Credit ratings agency Fitch was drawn into an Italian
investigation of alleged market manipulation when prosecutors widened a probe
beyond its two bigger rivals Standard & Poor’s and Moody’s, an
investigative source said on Tuesday.
police visited Fitch’s Milan offices, less than a week after seizing documents
at S&P, a senior prosecutor said.
from the financial police are at Fitch in Milan,” said Carlo Maria Capristo,
chief prosecutor in Trani.
source said the investigation by Trani prosecutors was extended to Fitch after
its analysts said earlier this month they could downgrade Italy by two notches
by the end of January.
was no immediate comment from Fitch.
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 programmes.
authorities also reacted angrily when S&P stripped the United States of its
cherished triple-A rating last August.
Trani prosecutors began their investigation last year, alleging that reports by S&P and Moody’s on Italy and its banking system provoked
sharp losses on the Milan stock market.
probe was extended to S&P’s decision to downgrade Italy earlier this month,
and now to Fitch’s threatened ratings cut.
whose Milan offices were searched on January 19, said then it was surprised and
dismayed by the investigation, adding the claims were baseless.
has said it takes the dissemination of market sensitive information seriously and is cooperating with authorities.
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.
also said news of the imminent downgrade was leaked when markets were still
rating 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”, the document said.
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
consumer groups have said they had first contacted prosecutors in Milan and
Rome but had been turned down.
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 were not enough information to warrant a probe.
investigative source said the Trani prosecutors hoped to conclude their probe
by the end of January.