AN ITALIAN court yesterday found Deutsche Bank, Depfa Bank, JP Morgan and UBS guilty of fraud for mis-selling derivatives to Milan in a case that could set a precedent for hundreds of local governments.
The court ordered the seizure of just under €90m (£73m) from the lenders, which were each fined €1m. Nine bank employees were handed suspended jail sentences of up to eight months.
The verdict related to a swap contract signed by the city of Milan council when it issued a €1.68bn, 30-year bond back in 2005.
“This is an historic sentence because it has recognised the principle that banks’ dealings with the public administration must be transparent,” prosecutor Alfredo Robledo told reporters after the verdict.
Deutsche Bank, JP Morgan and UBS said in separate statements they had done nothing wrong and would appeal.
City A.M. Reporter