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October 13, 2008 8:45:20 AM CDT

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International Banks Face Trial in Italian Court

Posted Jun 13, 07 10:15 AM CDT in Business 

(Newser) – Four gold-plated investment banks have been ordered to stand trial for alleged market manipulation for their roles in advising Italian dairy giant Parmalat, which declared bankruptcy in 2003. Italian prosecutors say Morgan Stanley, Deutsche Bank, UBS, and Citigroup allowed Parmalat to manipulate its finances, helping it to defraud investors even after the banks were aware of the company's troubled finances.

Parmalat's bankruptcy—Europe's largest ever—exposed over €14 billion ($19 billion) in hidden debt, eight times what its books showed. Prosecutors filed criminal charges after learning Parmalat completely falsified earnings from 1992 on. Six thousand investors have filed a separate class-action suit in the US; Parmalat is suing the banks that advised it for nearly €20 billion, the AP reports.

Source Bloomberg

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The Citibank logo is shown on a branch office in this April 11, 2007 file photo in New York. A Milan judge Wednesday June 13 2007 indicted four International banks on charges related to the 2003 failure...   (Associated Press)
Logo on the headquarters of the Union Bank of Switzerland (UBS) taken Feb. 14, 2006. A Milan judge on Wednesday June 13, 2007 indicted four international banks on charges related to the 2003 failure of...   (Associated Press)
The world headquarters of Morgan Stanley is shown Friday, Sept. 2, 2005 in New York. A Milan judge Wednesday June 13 2007 indicted four International banks on charges related to the 2003 failure of the...   (Associated Press)
A sign of Deutsche Bank headquarters in Milan, Italy, Friday, Jan. 23, 2004. A Milan judge Wednesday June 13 2007 indicted four International banks on charges related to the 2003 failure of the Parmalat...   (Associated Press)
FILE PHOTO Parmalat Sues Citigroup   (Getty Images)
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Citigroup  • fraud  • bank  • bankruptcy  • Morgan Stanley  • UBS  • Deutsche Bank


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