Lehman Credited for Parmalat Warnings

Investment bank published a number of reports in 2003 that criticized the company's finances.

Lehman Brothers is emerging as a hero for its role in the Parmalat accounting scandal. According to Dow Jones, prosecutors are crediting the investment bank for blowing the whistle even as other lenders continued to do business with the dairy and food conglomerate.

According to a court document examined by the news service, Lehman published a number of reports in 2003 that criticized the company’s finances. The document elaborated that Parmalat founder Calisto Tanzi and other company officials damaged Lehman’s reputation when they responded by accusing the U.S. bank of market rigging.

Parmalat filed for bankruptcy protection on Christmas Eve of that year.

The wire service noted that Lehman is not seeking damages, acknowledging that Parmalat has no money left and that the Tanzi family has been already ruined by the scandal. Lehman declined further comment.

“There were numerous red flags in the financial accounts of Parmalat that were overlooked or ignored by financial advisers to the former executives of Parmalat,” a spokesman for the food giant told the wire service. “The result was that billions of dollars were lost by investors.”

Among the banks that have been investigated by Italian officials include units of Citigroup, UBS, Deutsche Bank, and Morgan Stanley.

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