Four banks acquitted of Milan derivatives fraud

Piazza del Duomo, Milan The decision overturned an earlier verdict

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Four international banks have been acquitted of mis-selling derivatives to the city of Milan.

Deutsche Bank, JPMorgan, UBS and the Dublin-based Depfa bank had appealed against a December 2012 verdict that ordered the seizure of 89m euros (£74m) and fines of 1m euros each.

Nine bank employees had suspended prison sentences of up to eight months quashed.

The appeal court in Milan found the banks had no case to answer.

"UBS is pleased that the Milan Criminal Court of Appeal today overturned all findings of liability [and] convictions and fully upheld the appeals of UBS and two current and one former employee," the company said on Friday.

The case related to a swap contract signed by the city of Milan council when it issued a 1.68bn euro, 30-year bond in 2005.

When the landmark trial began in 2010, the suit was seen as a test case for dozens of Italian cities that had lost money through similar deals.

Between 1997 and 2007, Italian cities and regions borrowed 111bn euros from investment banks. Repayments were funded by derivatives called swaps.

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