Regulators are alarmed that a company could tap the capital markets while on the brink of bankruptcy, and are asking whether by raising funds through unregistered offerings issuers can avoid proper examination before raising capital. Of particular concern to banks’ legal and accounting advisers is whether professional advisers on securities issues could be held liable for failing to expose Parmalat’s troubles.
Since Parmalat declared bankruptcy on December 24, US regulators have been working with Italian counterparts.
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