Sour milk and cookies

29 July 2004 By Rob Cox Follow @rob1cox

The timing of the US bank s poaching of lawyer Steven Volk from CSFB is uncanny. It will need all the help it can get. Of all the banks that worked with Calisto Tanzi as Parmalat defrauded investors, Citigroup probably has the most to answer for. The timing of the US bank s poaching of lawyer Stephen Volk from CSFB is uncanny. It will need all the help it can get.

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Parmalat filed a lawsuit in a New Jersey court alleging Citigroup knowingly helped the Italian dairy company's previous management led by founder Calisto Tanzi to disguise losses and conceal debt.

Citigroup said: "We have not had an opportunity to review the lawsuit and are unable to comment on it. However, Citigroup lost hundreds of millions of dollars as a result of Parmalat's fraudulent conduct, and we will continue to pursue our substantial claims against the company and defend against frivolous claims in search of a deep pocket."

The lawsuit targets three transactions in particular in which Citigroup played a role, including a securitization arrangement and the establishment of a Swiss financing vehicle called 'buconero,' Italian for black hole.

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