STOCK MARKET WATCH -- Thursday, 20 December 2012

[Demeter]

16. Added blow for UBS in Italy derivatives trial verdict

http://uk.reuters.com/article/2012/12/19/uk-italy-banks-trial-idUKBRE8BI0XI20121219

An Italian court on Wednesday found Deutsche Bank (DBKGn.DE), Depfa Bank, JP Morgan (JPM.N) and UBS (UBSN.VX) 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 90 million euros from the lenders which were each fined 1 million euros ($1.3 million). Nine bank employees were handed suspended jail sentences of up to eight months.

The verdict, coming on the same day that UBS was fined $1.5 billion for manipulating global interest rates, related to a swap contract signed by Milan city council when it issued a 1.68 billion euro, 30-year bond in 2005.

The four banks were accused of making 100 million euros in illicit profit and lying about the risks linked to the deal.

"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 they had done nothing wrong and would appeal....