Italian prosecutors are investigating two leading credit rating agencies after consumer groups complained about turbulence on financial markets, AP quoted officials as saying on Thursday. Recent reports and rating decisions issued by Moody's and Standard & Poors amount to a "failure" of judgment regarding Italy's government finances, prosecutor Carlo Maria Capristo told Italian broadcaster Sky TG24 TV. Investigators seized documents in offices of both firms, prosecutors said during a televised news conference. The probe began months ago, spurred by contentions from Italian consumer groups that unjustifiably pessimistic rating reports were causing Italian stocks to tank. Three analysts from S&P and one from Moody's are under investigation, Italian news agency ANSA reported. The ratings agencies "have lost all credibility," Elio Lannutti, head of the Adusbef consumer group told Sky TV. Moody's said in a statement it is cooperating with authorities. "Moody's takes its responsibilities surrounding the dissemination of market sensitive information very seriously," it added. Standard & Poors said the accusations were unfounded. "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 a statement from the ratings agency. Calls to offices of Trani prosecutors and police went unanswered Thursday evening. The Italian stock market watchdog, Consob, declined to comment on the investigation. Thursday saw strong turbulence on Italy's main stock exchange in Milan, where the FTSE MIB benchmark index ended down 5.16 percent amid fears that the eurozone's debt crisis might eventually spread to Italy. Trading had begun with a rise, of 1.2 percent, a day after Premier Silvio Berlusconi - in a much awaited speech to lawmakers - proclaimed Italy's economic foundations "solid." He also maintained that the recently approved austerity measures were sufficient to help rein in public debt. -- SPA
