Abstract
Coming shortly after the Enron and WordCom scams, the Parmalat scandal offers a good
opportunity to compare failures on both sides of the Atlantic. In this paper, we start by
tracing Parmalat’s history and describe the frauds and the criminal proceedings and civil
actions that followed the company’s collapse both in Italy and the US. We then focus
on Parmalat’s governance and gatekeepers, and argue that gatekeepers are substantially
undeterred in Italy because of poor enforcement rather than legislative black holes. In
fact, law on books, in particular the civil law concerning auditors, is even more severe
than common law. We subsequently analyse the causes of under-enforcement and the
reasons why Parmalat generated litigation in the US rather than Italy. Drawing from
economic analysis, we explain the role of private enforcement and consider the benefi ts
of class actions. In this respect, we emphasize the importance of discovery and pleading
rules. We also fi nd that the interplay between public and private enforcement is missing in
Italy and argue, by way of conclusion, that US securities regulation was transplanted into
Continental Europe without suffi cient modernisation as to civil procedure in the area of
mass claims and complex litigation.