Four international banks, Morgan Stanley, Deutsche Bank, UBS and Citigroup, were ordered to stand trial on Wednesday in connection with the 2003 collapse of Italian dairy giant Parmalat.
Judge Cesare Tacconi ordered the banks and 13 individuals to be tried on market-rigging charges.
The trial will begin next January in Milan.
In the meantime, Tacconi will rule on plea-bargain requests filed by asset manager Nextra and four of its employees in the same case.
The banks have all denied wrongdoing.
Morgan Stanley issued a statement on Wednesday saying that "Morgan Stanley has carried out a complete re-examination of its dealings with Parmalat... and believes that its conduct and that of its employees were completely correct".
It stressed that it did not know of Parmalat's insolvency at the time.
UBS said that its operations with Parmalat were "valid" and that "there was no conduct by the bank or by its employees which could be considered in terms of a crime of market rigging".
"Parmalat was judged by independent rating agencies to be a financially solid company and this position was confirmed by auditors," the bank continued.
"UBS is convinced that its proper and fair behaviour will be amply demonstrated," it concluded.
Citigroup said the bank and its CEO Paolo Botta "are certain that the outcome of the hearings will prove they had nothing to do with the allegations and that Citigroup is the injured party".
The public prosecutor leading the case, Francesco Greco, commented that the decision to try the four banks was "good news" for small investors hit by Parmalat's bankruptcy.
"This is the first time that banks have been indicted for manipulating the market. It will be a very difficult trial," he said.
OTHER TRIALS PARMALAT TRIALS.
Parmalat collapsed into bankruptcy amid debts of some 14.5 billion euros in what was one of the world's biggest accounting fraud scandals.
Parmalat's bankruptcy - dubbed 'Europe's Enron' - left more than 150,000 investors with virtually worthless bonds.
From 1990 until 2002, Parmalat lost money every year except one but nonetheless reported uninterrupted profits and routinely forged documents in order to deceive banks and regulators.
The US Securities and Exchange Commission called the case "one of the largest and most brazen corporate financial frauds in history".
Former Parmalat chief Calisto Tanzi, who is on trial in Milan and Parma, claimed in court last year that the banks were to blame for Parmalat's collapse, together with his own financial ineptitude.
Parmalat's current CEO Enrico Bondi also testified that the banks knew "without a doubt" that the group could not pay its bonds but continued to help float them, often higher than market rates.
In Milan, Tanzi and 15 other defendants are being tried on a range of charges, including market rigging, false auditing, misleading investors and hindering the regulatory activities of bourse watchdog Consob.
The defendants include former Parmalat and Bank of America employees, two ex-Deloitte & Touche auditors and two auditing firms, the former Italian unit of Grant Thornton and the Italian office of Deloitte & Touche.
The trial opened in September 2005.
A separate trial is under way in Parma, where the multinational has its headquarters, to deal with other charges related to the group's collapse, including those of fraudulent bankruptcy, false accounting and embezzlement.
The Parma trial involves 62 defendants including Tanzi and opened in June 2006.
Parmalat has since been put back on its feet by corporate turnaround expert Bondi who, as government-appointed administrator first and later as official CEO, shed the group's non-core activities, cut foreign activities and reduced staff.
This enabled him to successfully bring Parmalat back to the stock market.
Bondi has reached settlements of more than $775 million in the US and Italy.
Deloitte Touche recently agreed to pay $149 million to resolve Parmalat claims in the US.
