In an interesting turn of events, a bank accused of failing to spot the fraud prevailed as a victim of the fraud instead, and awarded damages. But another hearing soon may determine whether a new round of civil claims can be made against the bank.
Europe’s biggest corporate fraud, which cost investors billions of euros and ensnared many of the world’s largest investment banks, is still reverberating, 15 years after it first emerged that the Italian dairy giant had cooked its books for more than a decade. An Italian court Wednesday ruled in favor of Parmalat’s owner in a long-standing dispute with Parmalat collapsed in 2003, filing for bankruptcy after it was revealed that a company bank account in the Cayman Islands holding €4 billion ($4.5 billion) didn’t exist. An audit later showed that the company had overstated sales and profit for over a decade and had debt of €14.3 billion, eight times more than declared. More than a dozen executives wound up in jail. Police caught one executive smashing a hard drive with a hammer, trying to destroy evidence.