Italy prosecutors seize Moody's, S&P documents

MILAN Thu Aug 4, 2011 11:24am EDT

Related Topics

MILAN Aug 4 (Reuters) - Italian prosecutors have seized documents at the offices of rating agencies Moody's and Standard & Poor's in a probe over suspected "anomalous" fluctuations in Italian share prices, a prosecutor said on Thursday.

The measure is aimed at "verifying whether these agencies respect regulations as they carry out their work," Carlo Maria Capistro, who heads the prosecutors' office in the southern town of Trani which is leading the probe, told Reuters.

The documents were seized at the Milan offices of the two agencies on Wednesday, he said, adding that prosecutors had also asked Italian market regulator Consob to provide documents relating to their registration in Italy.

S&P in Italy said in a statement it believed the probe was "groundless."

"We strongly defend our work, our reputation and that of our analysts," it said.

Moody's said it "takes its responsibilities surrounding the dissemination of market sensitive information very seriously and is cooperating with the authorities."

The Trani prosecutors have opened two probes -- one for each rating agency -- after a complaint by two consumer groups over the impact of their reports about Italy on Milan stock prices.

The first complaint was filed against Moody's after it published a report in May 2010 about the risk of contagion for Italian banks from the Greek crisis.

A second complaint filed in May this year targeted Standard & Poor's after it threatened to downgrade Italy's credit rating because of its huge public debt.

The prosecutors are also investigating whether any crimes were committed during a sell-off in Italian assets on July 8 and July 11 as fears spread that the euro zone's third largest economy is being sucked into the widening debt crisis.

One of the consumer groups behind the complaints said the probe was aimed at finding out whether the market's sharp drop was due to a "precise scheme by hedge funds and other unidentified players that could be linked to the negative comments about Italian public finances by the rating agencies."

Consob last month summoned Moody's and S&P for meetings and urged them not to release their statements during market hours.

(Reporting by Sara Rossi and Valentina Za; Editing by Anna Willard)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see
Comments (6)
hariknaidu wrote:
I’ve argued here that Hedge Funds are not only speculating on Euro FX
rate market but colluding with rating agencies to spook the chosen markets in their favour. Something similar took place on US housing market during the WS subprime AAA rating…leading to financial meltdown. It’s high time there is absolute transparency on S&P, Moody and other rating agencies, so they don’t counteract against the Euro currency and whatnots.

Aug 04, 2011 12:25pm EDT  --  Report as abuse
Intriped wrote:
Wow, Italy is really shaken in the old boots ha.

Aug 04, 2011 1:18pm EDT  --  Report as abuse
bobw111 wrote:
I’ll bet that George Soros, the king of the hedge funds, is making billions on Europe right now.

Aug 04, 2011 2:33pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.