A Milan court on Monday acquitted four international banks and six managers on criminal charges related to the 2003 collapse of the Parmalat dairy empire.
The banks all immediately issued statements expressing satisfaction with the ruling, which brings to an end the 2-year-old trial, one of a series seeking to assign blame in the stunning corporate failure that still ranks as Europe's largest. Parmalat collapsed under the weight of its euro14 billion mountain of debt.
"You know better than I who are the real responsible parties who created this disaster," Citi lawyer Nerio Dioda told reporters outside the courtroom.
The four banks __ Citigroup Inc., Morgan Stanley, Deutsche Bank AG and Bank of America Corp. _ were all cleared of an administrative charge of failing to have procedures in place that would have prevented the alleged fraud. Six bank managers also were cleared on market-rigging charges.
The banks, which claimed they were defrauded by Parmalat, always denied wrongdoing.
"The charges were unfounded. There was no proof. We proved, I believe, that the banks had a good organization," said Francesco Isolabella, a Deutsche Bank lawyer.
Calisto Tanzi, the 72-year-old Parmalat founder, has been found guilty in two trials, but so far remains free. He was sentenced to 18 years in prison by a court in Parma last December on a conviction of fraudulent bankruptcy and criminal association, and to 10 years in Milan in 2008 on a conviction of market rigging and other charges.
In the Parma case, another 16 defendants were convicted and sentenced to lesser terms.
In the Milan bank trial, prosecutors petitioned the court to confiscate euro120 million from the four banks in penalties and damages.
However, many of the defrauded bondholders have already reached a deal with banks outside of court. In agreeing to the settlement, the banks did not concede responsibility.
A lawyer representing 32,000 Italian bondholders, Carlo Federico Grosso, said they had recovered 40 percent of the losses in out-of-court settlements with the banks, which issued the Parmalat bonds, over the last two years. That, combined with shares in Parmalat when it emerged from bankruptcy means that Italian bondholders who joined legal cases to recover damages recovered 70 to 80 percent of their investment.
"For a failure like this, that is a good result," Grosso said.
However, consumer groups expressed disappointment with the ruling.
"A fraud of this kind never would have been possible without the collaboration of the banks that issued the bonds," said Pietro Giordano of Adiconsum. Carlo Rienzi of Codacons. He called the verdict "a shame" and on bondholders to seek damages in civil courts.
In all, some 120,000 investors lost money in the collapse, but only around 40,000 sought to recoup damages in the criminal trials.
The legal trouble for banks that issued the bonds, however, is not over. Many face trial for fraudulent bankruptcy just getting underway in Parma more than seven years after the failure.