An Italian prosecutor filed charges of market manipulation against Standard & Poor's and Fitch ratings agencies today over downgrades of Italy's credit rating that helped fuel the euro debt crisis.
Prosecutor Michele Ruggiero filed charges which carry a maximum sentence of three years in prison against seven people, five of whom worked at S&P's, while the other two worked at Fitch at the time of the alleged crime.
The agencies "intentionally provided financial markets with biased and distorted information," the prosecutor's office said in a statement.
The decision comes as a landmark since rating agencies came under concentrated attack, particularly from governments as first the financial then the eurozone crises occurred.
Critics objected that the agencies did not see the crises coming and some also suggested their decisions on sovereign debt and the timing of announcements was not objective, an allegation the agencies denied.
Those charged are accused of setting out to "destabilise Italy's image, prestige and credit confidence on the financial markets; alter the value of Italian bonds, depreciating them; (and) weaken the euro," the statement said.
Among those charged are Deven Sharma, the head of S&P's from 2007 and 2011, and the operational director for Fitch, David Michael Willmoth Riley.
The charges have to be confirmed by a judge for any trial to go ahead -- a process which could take months under the Italian judicial system.
The ratings agencies have cooperated with the inquiry but insist their economic evaluations were independent and based on objective factors.
The investigation began after an Italian consumer group lodged a complaint against Moody's in 2010 for a downgrade of Italy's sovereign rating which rattled the financial markets and pushed up the country's borrowing costs.