Settlement in Lawsuit Charging Soybean Manipulation
CHICAGO (AP) _ A conglomerate at the center of Italy’s biggest corruption scandal has agreed to pay a reported $21.5 million to settle a lawsuit accusing it of manipulating the soybean futures market on the Chicago Board of Trade in 1989.
The dispute involved the conglomerate formerly known as Ferruzzi Finanziari S.p.A.
In 1989, the Board of Trade, the world’s largest futures market, became concerned about Ferruzzi’s large share of soybean contracts and pleaded with the company to reduce its holdings.
After the company refused time and again, the exchange issued an order to force it to do so, contending Ferruzzi’s position threatened to cause a sharp, artificial increase in prices.
Farmers, traders and farm industry groups said they suffered severe financial losses from the order and sued, seeking unspecified damages.
Ferruzzi denied it was trying to corner the soybean market. The company held contracts for 23 million bushels of soybeans, which it said it needed for its overseas processing operations after a major drought and short crop.
Neither side would comment on the size of the settlement, which is subject to approval by a federal judge in Chicago. But the Chicago Tribune, citing unidentified sources, said the company will pay $21.5 million.
Ferruzzi lost at least $350 million on the soybean debacle, Italian investigators have said. Earlier this year, the company changed its name to Compagnia di Partecipazioni Assicurative ed Industriali, or Compart.
Compart is Italy’s second-largest privately owned industrial group, with interests in agriculture, energy and chemicals.
``This is an old, old case based on actions of former management. It is consuming far too much time,″ said Carlo Tarsia, a spokesman for a Compart subsidiary.
Ferruzzi flourished in a system in which business deals were expedited by bribes and kickbacks to politicians.
Before the company’s collapse, its president, Raul Gardini, entertained Italy’s most powerful figures at places such as his canal-side suites in Venice or the company’s hunting lodge in Tuscany. He committed suicide in 1993, just before Italian officials could arrest him.