JPMorgan Wins U.K. Ruling on Document Request for Milan Case

JPMorgan Chase & Co. (JPM), UBS AG (UBSN) and two other banks won an attempt to block U.K. prosecutors from seizing documents that Italian authorities sought to use at a criminal trial over derivatives, a London judge ruled today.

The lenders, along with Deutsche Bank AG (DBK) and Depfa Bank Plc, won a ruling quashing a request for information from the U.K. Serious Fraud Office, Judge Peter Gross said in a judgment issued today in London. The SFO had an “obvious lack of authority” in the case, Gross said.

“It is with considerable reluctance that I have come to the conclusion that assistance should not be given in this case in response to the letter of request” from the Milan prosecutor, Gross said.

Prosecutors in Milan accused the four banks, which arranged swaps for the city to restructure its debt, of misleading municipal officials and earning 101 million euros ($128 million) in hidden fees from the deals. The banks, which deny the fraud charges, settled with the city government in a separate civil case in March and agreed to unwind its interest-rate swaps, which adjusted payments on 1.7 billion euros of bonds sold in 2005.

The banks told the London court in May that the SFO shouldn’t be allowed to use “coercive measures” that wouldn’t be available to prosecutors in Italy.

Considerable Sympathy

“In its ruling today, the court expressed a considerable degree of sympathy for the position of both the Home Secretary and the SFO,” David Jones, a spokesman for the U.K. prosecution agency, said in an e-mailed statement.

Officials at the four banks all declined to comment. Milan prosecutor Alfredo Robledo didn’t immediately return calls seeking comment on the ruling.

The prosecutor leading the Milan case used the accounts of an Italian bank on a similar transaction to show that lenders set terms in their favor in swap deals. A witness testified during a trial in Milan over the derivatives sales that the city’s swaps may have broken rules on how municipalities can use derivatives, partly because they were used to raise funds instead of hedging risk.

The case is: The Queen on the application of UBS Limited v. Serious Fraud Office, CO/3165/2012, High Court of Justice, Queen’s Bench Division.

To contact the reporter on this story: Jeremy Hodges in London at

To contact the editor responsible for this story: Anthony Aarons at

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