Violation One The former CEO and founder, Calisto Tanzi, admitted that he and the top managers forged and cooked Parmalat’s account for over a decade (Galloni, Reilly, & Reilly, 2003). The CEO and their top managers who are the relatives of the CEO decided to start some special purpose entities to cover the debt and lose of Parmalat. Those SPEs covers billions debt for a decade long and was not covered by auditors. Parmalat offered falsified financial statement for the public investors. All these actions were trying to mislead that Parmalat was making profit so the price of stock won’t fall. Parmalat was also issuing debt during the years when it was actually losing money. This action violated the following section of Sarbanes-Oxley Act:
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