Italy has completed an investigation on S & P and five analysts could be prosecuted

Italian prosecutors have completed an investigation aimed at downgrading the country by the rating agency Standard & Poor’s (S & P), and five current and former analysts may face criminal trials, a source close to the situation said. The investigation, which may lead to impeachment of the five analysts S & P is part of a broader investigation into a series of downgrading, leading to massive sales of Italian assets in January and have increased the frustration about rating agencies.

European officials have said repeatedly that the agencies were quick to downgrade European countries, despite the aid programs and austerity measures adopted by governments. Italian prosecutors are investigating possible market manipulation and abuse of privileged information. Rating agency deny that there are grounds for an investigation. “We consider the alleged accusations unfounded and not supported by evidence. We will continue to vigorously defend the actions and reputation of the company and of our employees,” reads a press release of S & P.

Italy’s frustration against rating agencies increased again in May after Moody’s did a mass downgrade of the country’s banking sector. Italian bankers and businessmen have described the decision as an irresponsible attack on a country going through a difficult spending cuts and reforms to control indebtedness. Prosecutors in the town of Trani said that reports of the S & P on the banking system and economy of Italy, and also reports from Moody’s and Fitch have been “dropped” to the public at least once during the stock market sessions, resulting in major decreases on the Milan stock market. The authorities also said that some reports contain inaccurate data.

Separate inquiries regarding Moody’s and Fitch will be completed in June, according to source. Trani prosecutors began the investigation after complaints from two consumer rights groups. Accusations of the two groups were previously rejected by the courts of Rome and Milan. The three major rating agencies have been heavily criticized worldwide for not having anticipated the credit crisis of 2008-2009. The United States reacted with outrage in August last year, when S & P left the largest economy in the world without maximum rating “AAA”, but didn’t go so far as to open investigations against rating agencies.