October 23, 2007 at 11:52 am by Tom Lydon
Could companies within the Italian exchange traded fund (ETF) iShares MSCI Italy Index (EWI) have ties to the mafia? Organized crime represents the biggest segment of the Italian economy, accounting for more than $127 billion in receipts and 7% of Italy’s gross domestic product (GDP), reports Peter Kiefer for The New York Times. Currently, EWI is up 4.1% year-to-date.
The news reflects a trend that has been ongoing for a few years, according to an annual report released yesterday. The report said it was becoming more difficult to tell the difference between legitimate business and criminal activity. The various forms of organized crime are extortion, usury, contraband, robberies, gambling and Internet piracy. The report also said that 80% of businesses in the cities such as Catania and Palermo regularly pay protection money, called "pizzo."
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