19 Apr 2011

Banks acquitted in Parmalat case

3:05 pm on 19 April 2011

Four banks have been acquitted by a court in Milan over accusations they did not take adequate steps to prevent Parmalat from committing fraud.

Prosecutors had wanted to seize a total of 120 million euros ($US171 million) from Morgan Stanley, Deutsche Bank, Citigroup and Bank of America.

The banks had denied the charges, claiming that they were also victims of the Parmalat fraud.

The Italian food conglomerate collapsed in 2003 with €14 billion of debts.

The four banks were accused of helping to mislead investors in the failed company.

The BBC reports 135,000 investors lost money they had invested in Parmalat's corporate bonds.

Calisto Tanzi, Parmalat's founder and former chief executive, was sentenced in December to 18 years in prison, for criminal association and fraudulent bankruptcy.