Saturday, August 6, 2011

S&P's and Moody's face Italian police raids under suspicions of fraud

The Italian offices of Moody's and Standard & Poor's have been raided by local authorities over allegations that the ratings agencies were involved in "anomalous" movements in domestic share prices.

Documents were taken from the Milan offices of the two agencies by Italian prosectuors as part of an investigation aimed at "verifying whether these agencies respect regulations as they carry out their work," according to Carlo Maria Capistro, the head of the prosecutors office in the southern Italian town of Trani which is heading the action.

The raids come at a time of rising tensions between ratings agencies and eurozone governments.

The agencies are blamed by some for exacerbating the region's sovereign debt crisis by downgrading many of the indebted countries.

Moody's and S&P dimissed the investigation and said it was without foundation.

"S&P considers the allegations being investigated are without any merit. We will vigorously defend our actions, our reputation and that of our analysts," said the agency. (more)