Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, June 14, 2007

Four Big Banks Indicted in Parmalat Scandal

Citigroup, Deutsche Bank, Morgan Stanley, and UBS will go on trial in Italy on charges of market manipulation in connection with the December 2003 collapse of Parmalat, the largest bankruptcy in Europe.  The trial will begin in January.  According to the indictment, the firms secured financing through the sale of bonds knowing that the financials had been falsified and was in financial difficulty.  The firms can be convicted if the prosecutors can prove the firms did not have policies in place to prevent their employees from committing the crimes.  According to the New York Times, the statute of limitations is seven and a half years, which the Times says means that "in most cases, the trial will have to be concluded by the end of 2010 or the charges will be dropped. With the trial not scheduled until January, and with a long appeals process likely if there are convictions, several legal experts said that the statute of limitations might come into play."  In Europe isn't the relevant period for limitations the filing of the charges?  See NYTimes, Trial Ordered in Italy for 4 Big Banks in Parmalat’s Failure, WSJ, Four International BanksTo Face Trial in Milan.

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