Post by jannikki on Jan 8, 2007 21:47:20 GMT -4
Hancock sues BofA in ponzi scheme
By Aaron Siegel
January 8, 2007
John Hancock Life Insurance Co. has sued Bank of America Corp. over its alleged role in the accounting fraud which brought down Italian food maker Parmalat Finanziaria SPA in 2003, leaving more than spilled milk, according to the Boston Herald.
The collapse allegedly came after executives at the Charlotte, North Carolina-based bank helped Parmalat carry out a large ponzi scheme.
Parmalat founder Calisto Tanzi and others at the Milan, Italy-based company allegedly cooked the books to make the company seem healthy despite losing $17 billion.
Italy charged former employees of BofA's office in Milan with taking bribes to help conceal the alleged fraud.
Hancock invested $81 million in Parmalat bonds in the 1990s, but claimed in its suit that BofA should have known about the deceptive accounting.
Hancock also alleged that BofA should have better supervised its Milan employees and added that it bought Parmalat bonds partly on the strength of BofA's reputation.
Hancock asked a court to void its purchase of the Paramalat bonds and award compensatory and punitive damages.
"As we have stated previously, in all of its dealings with Parmalat, Bank of America believed that it was dealing with a strong, honest and profitable company and had no knowledge of the fraud perpetrated by Parmalat and its senior management," according to a statment from Bank of America.
"Bank of America had no knowledge of any diversion of funds by former employees as has been alleged in this lawsuit.
"These alleged actions, if true, were clearly not within the scope of the employees' duties at the company. "
This alleged conduct violates BofA's code of ethics, employment policies and everything we stand for as a company," the statement continued.
www.investmentnews.com/news.cms?newsId=3400
By Aaron Siegel
January 8, 2007
John Hancock Life Insurance Co. has sued Bank of America Corp. over its alleged role in the accounting fraud which brought down Italian food maker Parmalat Finanziaria SPA in 2003, leaving more than spilled milk, according to the Boston Herald.
The collapse allegedly came after executives at the Charlotte, North Carolina-based bank helped Parmalat carry out a large ponzi scheme.
Parmalat founder Calisto Tanzi and others at the Milan, Italy-based company allegedly cooked the books to make the company seem healthy despite losing $17 billion.
Italy charged former employees of BofA's office in Milan with taking bribes to help conceal the alleged fraud.
Hancock invested $81 million in Parmalat bonds in the 1990s, but claimed in its suit that BofA should have known about the deceptive accounting.
Hancock also alleged that BofA should have better supervised its Milan employees and added that it bought Parmalat bonds partly on the strength of BofA's reputation.
Hancock asked a court to void its purchase of the Paramalat bonds and award compensatory and punitive damages.
"As we have stated previously, in all of its dealings with Parmalat, Bank of America believed that it was dealing with a strong, honest and profitable company and had no knowledge of the fraud perpetrated by Parmalat and its senior management," according to a statment from Bank of America.
"Bank of America had no knowledge of any diversion of funds by former employees as has been alleged in this lawsuit.
"These alleged actions, if true, were clearly not within the scope of the employees' duties at the company. "
This alleged conduct violates BofA's code of ethics, employment policies and everything we stand for as a company," the statement continued.
www.investmentnews.com/news.cms?newsId=3400