Sunday, June 26, 2005

Parmalat CEO to Stand Trial for Fraud

A judge in Milan, Italy, ordered Parmalat CEO and founder Calisto Tanzi to stand trial beginning Sept. 28 on charges related to the accounting fraud that led to the company's bankruptcy.  In addition, Italian officers of Bank of America, accounting firm Grant Thornton, and Parmalat's accountant Deloitte & Touche, are among others who will also be tried in the case.  The Milan charges are the result of one branch of the investigation of Parmalat's collapse, which included falsified documents on Bank of America stationary indicating large accounts at off-shore banks that never existed, except of course on the company's balance sheet that was widely circulated to investors in its bonds.  An investigation in Parma, Italy, site of the company's headquarters, is continuing.  On the civil side of the Parmalat case, Morgan Stanley agreed to pay €155 million to settle claims by Parmalat related to underwriting of the company's bonds (8-K here). An AP story (here) discusses the charges against Tanzi and others. (ph)

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Fraud, International, Prosecutions | Permalink

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