A Milan judge has ordered Citigroup, UBS, Morgan Stanley and Deutsche Bank to stand trial for alleged market-rigging in connection with dairy firm Parmalat's collapse, judicial sources said today.
Judge Cesare Tacconi also ordered 13 people to face trial on the same charges, at the end of preliminary hearings into the case, the sources said.
Parmalat, Italy's biggest listed food company, buckled under massive debts in 2003. It was restructured and relisted on the Milan bourse in 2005. The trial is scheduled to start on January 22nd, 2008.
Citigroup said in a statement that the bank and executive Paolo Botta "are certain that the outcome of the debate will prove they had nothing to do with the allegations and that Citigroup is the injured party".
Morgan Stanley said in a statement it had "conducted a complete re-examination of its dealings with Parmalat ... and found that (everything) had been done correctly". UBS said its dealings with Parmalat were correct and "did not imply any action that could be qualified as market-rigging".
Deutsche Bank has also denied any wrongdoing. Asset manager Nextra asked to plea bargain in the case last month. Prosecutor Francesco Greco welcomed the move, saying it was good news for savers who could be compensated soon even if there were out-of-court settlements.
"It is the first time that there will be a trial of the banks accused of having manipulated the market. It will be a very difficult trial," he said.