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Italian judge convicts 4 foreign banks of fraud

Wednesday - 12/19/2012, 11:50am  ET

MILAN (AP) -- An Italian judge has found four international banks guilty of fraud in a case involving the sale of derivatives to the city of Milan and ordered the confiscation of EUR88 million ($117 million).

Judge Oscar Magi on Wednesday convicted Deutsche Bank, UBS, JP Morgan and Depfa Bank, as well as nine current and former bankers. In Italy, institutions may be held responsible as well individuals. The individuals received suspended sentences of six months to eight months.

The banks have denied wrongdoing.

Prosecutors allege that the city of Milan lost EUR105 million as part of the sale of bonds totaling EUR1.69 billion between 2005 and 2007.

Prosecutor Alfredo Robledo said the verdict recognized the importance of "the fundamental principal of transparency on the part of banks in contracts with public administrations."

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