Bank of America is the latest among a number of global banks that have been ordered to stand trial for alleged bid-rigging by some of its employees related to the collapse of Italian dairy giant Parmalat.
The trial will start on January 23 in Milan, according to Reuters. “When the case comes to trial, we believe the evidence will show that the charges against Bank of America are completely unfounded,” the bank said.
Last month the judge who made the ruling ordered Citigroup, Morgan Stanley, Deutsche Bank, and 13 people to stand trial for market-rigging. That trial is due to start on January 22, according to the news service. The banks have denied any wrongdoing.
A 2001 Italian law holds companies responsible if they haven’t installed specific checks and balances to thwart crimes by employees, the news service reported. “Bank of America had in place all appropriate governance policies and procedures,” the bank reportedly stated.
BofA told the wire service that the judge’s ruling that it stand trial is similar to one issued for four other banks. Last month Parmalat announced that it settled civil lawsuits stemming from its collapse with three major international banks for a total of 72 million euros, or more than $96 million. Merrill Lynch agreed to pay Parmalat 29 million euros ($39 million), Banca Monte Parma agreed to pay 35 million euros ($46.91 million), and ING Bank agreed to pay 8 million euros ($10.72 million). Parmalat still has suits pending against Citigroup and Grant Thornton, the audit firm.
Last week BofA asserted in an Italian court that it lost about $450 million because of Parmalat’s 2003 bankruptcy. “It will take a great deal of time before Bank of America is able to recoup those losses for our own shareholders through our continuing business in your country,” the bank stated.
BofA acknowledged that many individual savers had invested in Parmalat bonds and stock, but asserted that it “never sold a single Parmalat bond to any individual investors in Italy or in the U.S.”