Citigroup Awarded $364M in Parmalat Accounting Fraud Case
Citigroup has been awarded $364.2 million for its counterclaim against Parmalat claiming the Italian dairy producer defrauded the financial services firm in an accounting scandal.
The verdict by a New Jersey jury is the fifth-largest so far this year, the American Lawyer reports. Citigroup was represented by lawyers from Paul, Weiss, Rifkind, Wharton & Garrison. Lawyers from Quinn Emanuel Urquhart Oliver & Hedges represented Parmalat.
Parmalat had filed a suit against Citigroup in 2003 that alleged the bank participated in fraud that led to the dairy company’s collapse, the Wall Street Journal reports (sub. req.). Citigroup has settled suits over its role in the collapse of Enron and WorldCom, the New York Times reports, but it fought the Parmalat case.
Parmalat lawyer Kenneth Chiate of Quinn Emanuel had argued in opening statements that Citigroup bankers wanted to earn higher bonuses and salaries by making loans to Parmalat, the Wall Street Journal Law Blog reports. Citigroup lawyer Ted Wells of Paul Weiss countered that Citi lost more money than any other creditor as a result of Parmalat fraud.
Citigroup’s legal troubles may not be over. The bank could face billions of dollars in claims in subprime mortgage suits, the Times story says.
