A New Jersey State Superior Court Judge yesterday approved Citigroup's request to dismiss Parmalat chief executive officer Enrico Bondi's claims of fraud, conspiracy, racketeering and unjust enrichment.

Bondi sought $US7bn (₤3.5bn) in damages in the case, which is scheduled to go to trial May 5, claiming Citigroup turned a blind eye to Parmalat's financial condition. Under New Jersey's racketeering law, any recovery might have been tripled, raising the award to $US21bn, Bloomberg reports.

Bondi has sought punitive damages against Citigroup for aiding and abetting larceny by corrupt insiders at Parmalat and those claims were accepted as part of the trial.

‘The market fears a similar situation for the other two US lawsuits, against Bank of America and Grant Thornton, both of which are headquartered in New York courts, a situation which would further cut expected legal proceeds,’ a Santander Private Banking analyst in Milan said in a note.

Further reading:

Parmalat trial starts as 50 face fraud charges

Parmalat bank hearings delayed