Parmalat class action against Deloitte US goes ahead

A class action against Deloitte & Touche in connection with the Parmalat
collapse has been allowed to go ahead by a US judge.

Federal judge Lewis Kaplan said that although the alleged fraudulent actions
relate to Deloitte Italy and not the US firm, he would not dismiss the claim.

In judging whether to dismiss the claim, judge Kaplan said that although the
evidence might suggest that the Deloitte network (Deloitte Touch Tohmatsu) was
not involved in influencing an issue between Deloitte Italy and Deloitte Brazil
regarding Parmalat, it was not conclusive.

‘The testimony upon which the Deloitte defendants rely would support a
conclusion at trial that DTT did not control the outcome of the Deloitte Brazil
– Deloitte Italy dispute and even, perhaps, a conclusion that DTT lacked the
authority to dictate the outcomes of disputes among member firms generally. But
the standard on a motion for summary judgment is different,’ said judge Kaplan.

‘Here the court is obliged to view the evidence in the light most favorable
to the plaintiffs. And by that standard, the argument falls short.

‘In all the circumstances, the totality of the evidence – including evidence
concerning the structure and internal relationships of Deloitte generally, DTT’s
authority over the professional practices of the member firms, and DTT’s
exercise of that authority in connection with the Parmalat engagement – raises a
genuine issue of material fact as to whether Deloitte Italy was an agent of DTT
with respect to the Parmalat engagement.’

View the judgement

Further reading:

Parmalat founder faces ten years
in prison

Analysts doubt Parmalat win
against Grant Thornton

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