Four major banks face trial in Parmalat case
An Italian judge has ordered four of the world’s biggest banks to stand trial in Parmalat case
Four of the world’s largest investment banks have been ordered to stand
trial, starting January 22 in Milan, for stock market manipulation during the
collapse of Parmalat in 2003.
A judge said
Citigroup,
Morgan Stanley, UBS
and Deutsche Bank knew Parmalat was bankrupt but continued to offer bond issues,
rather than telling the market, in order to make fees from the dying company,
The Business magazine reports.
However, JP Morgan, Bank of America, Banco Santander and ABN Amro, which were
also among banks providing financial services to Parmalat, have not been
charged. Enrico Biondi, the current head of Parmalat, said the four banks knew
of Parmalat’s problems but continued to offer to raise more debt for the
company.
The banks deny the charges. UBS said its conduct had been ‘proper’, while
Morgan Stanley would ‘vigorously contest’ the charges, Citigroup said the trial
would show it was a victim and Deutsche Bank denied any wrongdoing.
Further reading:
Grant Thornton faces ?5bn claim from Parmalat
Parmalat recovers €420m from Intesa
