UPDATE 1-Top judge named to Milan derivatives fraud trial

* New judge handled Google, CIA cases

* UBS, Deutsche, Depfa, JPMorgan accused

* 13 people also on trial on fraud charges

* Credit default swaps “carpeted” Italy – prosecutor

(Adds details, judge’s background, quote)

By Manuela D’Alessandro

MILAN, May 6 (BestGrowthStock) – The closely watched fraud trial of
four foreign banks was put back to May 19 on Thursday so one of
Italy’s best-known judges can take the case.

The trial is seen as a test case for hundreds of cities
facing heavy losses from derivatives deals with leading banks.

The trial is being reassigned to Oscar Magi, who oversaw the
trial of Google Inc (Read more about Google Stock Analysis) (GOOG.O: ) executives convicted in February
for Internet privacy violations. [ID:nLDE61N2G2]

He also sentenced 23 Americans in absentia to prison last
year for the 2003 Central Intelligence Agency kidnapping of a
terrorism suspect in Milan. [ID:nLDE61018V]

UBS AG (UBSN.VX: ), Deutsche Bank (DBKGn.DE: ), Germany’s Depfa
and JPMorgan Chase & Co (JPM.N: ) face aggravated fraud charges
over an interest rate swap on a 1.68 billion euro ($2.25
billion) bond issued byu Milan, the biggest issued by an Italian
city.

Eleven bank employees and two former Milan city employees
face the same charges arising from a 30-year bond issued in 2005
by Milan, Italy’s fashion and financial capital.

Prosecutor Alfredo Robledo told reporters that the Milan
case could have a “domino effect” on interest rate swaps signed
by other local goverments throughout Italy.

“The important thing that has emerged is that the banks
derived greater profit than that declared to the market. Italy
was carpeted with this type of contracts,” he said.

Those charged are accused of lying about the swap and
falsely representing the deal as a way to reduce Milan’s debt.
The banks have denied wrong-doing.

Aggravated fraud involves fraud against public entities.

Fabio Amatucci, an expert on local government finances at
Milan’s Bocconi University, estimated potential losses from
derivatives for local authorities at 3.5 billion euros to 4
billion euros.

Investing Analysis

(Writing by Ian Simpson; Editing by David Cowell)

($1=.7453 Euro)

UPDATE 1-Top judge named to Milan derivatives fraud trial