Four gold-plated investment banks have been ordered to stand trial for alleged market manipulation for their roles in advising Italian dairy giant Parmalat, which declared bankruptcy in 2003. Italian prosecutors say Morgan Stanley, Deutsche Bank, UBS, and Citigroup allowed Parmalat to manipulate its finances, helping it to defraud investors even after the banks were aware of the company's troubled finances.
Parmalat's bankruptcy—Europe's largest ever—exposed over €14 billion ($19 billion) in hidden debt, eight times what its books showed. Prosecutors filed criminal charges after learning Parmalat completely falsified earnings from 1992 on. Six thousand investors have filed a separate class-action suit in the US; Parmalat is suing the banks that advised it for nearly €20 billion, the AP reports. (Read more Parmalat stories.)