Banks Cleared In “European Enron” Case
Banks Cleared In “European Enron” Case
A court in Milan, Italy has cleared four major banks of market-rigging charges in a high-profile trial related to the 2003 collapse of food giant Parmalat. Citigroup, Bank of America, Morgan Stanley and Deutsche Bank had been accused of helping the Italian food conglomerate mislead investors at the time of the Parmalat scandal, which some have dubbed the “Enron of Europe.”
Earlier this year, an Italian prosecutor asked that the four banks be fined and that at least 120 million euros, ($173.5 million), should be seized. All four banks have consistently denied any wrongdoing in the matter.
Parmalat collapsed in 2003 under the weight 14 billion euros in debt. The company's bankruptcy wiped out the savings of more than 100,000 retail investors who had bought its investment-grade corporate bonds. Italy's biggest listed food group, Parmalat is now at the center of a battle for its control between French dairy giant Lactalis and a group of Italian investors trying to assemble a consortium.
Monday's ruling, meanwhile, cleared not only the banks, but all executives who had been charged were cleared, as well. Calisto Tanzi, Parmalat's founder and acting CEO at the time of the scandal, has been sentenced to 18 years in prison after he was found guilty on charges of fraudulent bankruptcy and criminal conspiracy in one of a handful of trials related to Parmalat's collapse.
A court in Milan, Italy has cleared four major banks of market-rigging charges in a high-profile trial related to the 2003 collapse of food giant Parmalat. Citigroup, Bank of America, Morgan Stanley and Deutsche Bank had been accused of helping the Italian food conglomerate mislead investors at the time of the Parmalat scandal, which some have dubbed the “Enron of Europe.”
Earlier this year, an Italian prosecutor asked that the four banks be fined and that at least 120 million euros, ($173.5 million), should be seized. All four banks have consistently denied any wrongdoing in the matter.
Parmalat collapsed in 2003 under the weight 14 billion euros in debt. The company's bankruptcy wiped out the savings of more than 100,000 retail investors who had bought its investment-grade corporate bonds. Italy's biggest listed food group, Parmalat is now at the center of a battle for its control between French dairy giant Lactalis and a group of Italian investors trying to assemble a consortium.
Monday's ruling, meanwhile, cleared not only the banks, but all executives who had been charged were cleared, as well. Calisto Tanzi, Parmalat's founder and acting CEO at the time of the scandal, has been sentenced to 18 years in prison after he was found guilty on charges of fraudulent bankruptcy and criminal conspiracy in one of a handful of trials related to Parmalat's collapse.
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