TRANI, Italy (Reuters) - An Italian prosecutor has asked for five current and former managers at credit ratings agency Standard & Poor’s to be jailed for alleged market manipulation in relation to a sovereign downgrade of the country, a court heard on Friday.

Italian prosecutor Michele Ruggiero leaves the Standard & Poors' offices in downtown Milan January 19, 2012. REUTERS/Alessandro Garofalo

Rating agencies have come under fire in Italy for their role during the sovereign debt crisis, when a series of cuts to the country’s ratings compounded economic and political problems that sent borrowing costs soaring.

Italian prosecutor Michele Ruggiero asked for jail sentences of between two and three years and fines of up to 500,000 euros for the officials, as well as a fine of 4.6 million euros for the rating agency itself.

A new hearing is scheduled for Jan. 25 and the judge is expected to then set a date for the verdict.

S&P said none of the accusations were backed up by proof.

In emailed comments, the agency said the various hearings had repeatedly shown S&P’s analyses had been in line with reports from the Bank of Italy and leading international institutions.

“The accusations against Standard & Poor’s are based on a bad interpretation of normal analytical debate, crucial for our ratings process,” it said.

Only four of the five people Ruggiero wants jailed are still with S&P.

The investigation against Standard & Poor’s, as well as rivals Fitch and Moody’s, was launched by prosecutors in Trani, southern Italy, in January 2012 following complaints by consumer associations.

Trani prosecutors allege that reports and rating moves by the agencies on Italy and its banking system during the euro zone debt crisis were mismanaged and provoked sharp losses on the Milan stock market.

The case against Moody’s was dropped in 2012.

Earlier this month, prosecutors asked for Fitch analyst David Riley to be jailed for nine months. Riley denies any wrongdoing.

In the case of Standard & Poor’s, prosecutors are focusing on its decision to cut to negative the outlook on Italy’s debt in May 2011, which was followed in September that year by a rating cut.

They are also taking aim at a move to cut Italy’s debt ratings by two notches again in January 2012, when the agency downgraded another eight euro zone countries.