Parmalat SEC Suit May Expand, Cover $1.5 Bln in Bonds
Jan. 6 (Bloomberg) -- The U.S. Securities and Exchange Commission may expand its case against Parmalat Finanziaria SpA by adding allegations that the bankrupt Italian food company committed fraud in selling $1.5 billion in bonds and notes to U.S. investors, an SEC official said.
Lawrence West, the enforcement official overseeing the Parmalat case, said the agency may widen a complaint filed last week in New York to add bonds sold in the U.S. from 1998 to 2002.
``It is possible that we would do that,'' West said about the new fraud claim in an interview. The original complaint cited alleged fraud in a planned sale of $100 million in notes to U.S investors last year. That sale fell through after Parmalat's auditors questioned some company accounts.
By expanding the New York complaint to cover securities actually sold in the U.S., the SEC may seek higher fines. U.S. law lets courts assess fines for the total amount of money gained from a fraudulent bond sale. In the original complaint, the SEC sought only unspecified ``substantial civil penalties.''"