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Cartel case to be heard in court next month

ANZ, Citigroup, Deutsche Bank and six individuals have been called to appear in court next month to answer allegations of cartel conduct regarding an institutional share placement.

On 1 June, it was revealed that the Commonwealth Director of Public Prosecutions (CDPP) is preparing to prosecute ANZ for being knowingly concerned in alleged cartel conduct relating to an arrangement or understanding allegedly made between the joint lead managers in relation to the supply of 80.8 million shares in August 2015.

The capital raising comprised a $2.5 billion placement.

The Australian Securities and Investments Commission (ASIC) is also investigating whether ANZ’s announcement on 7 August 2015 should have stated that the joint lead managers took up approximately 25.5 million shares of the placement.

This represented approximately 0.91 per cent of total shares on issue at that time and was jointly underwritten by Citigroup Global Markets Australia, Deutsche Bank AG and JPMorgan.

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The CDPP, following a referral by the Australian Competition and Consumer Commission (ACCC), is now bringing legal proceedings against ANZ, Citigroup and Deutsche Bank; however; JPMorgan has been reportedly granted immunity from the proceedings as a result of whistleblowing on the matter.

The three banks have all denied the allegations, which Treasurer Scott Morrison has said are “very serious matters”.

Individuals named by the ACCC

The ACCC has now revealed that criminal charges have also been laid against several senior executives:

  • Citigroup's head of capital markets origination John McLean, its former head of markets Itay Tuchman, and its former Australian CEO Stephen Roberts;
  • Deutsche Bank's former Australian CEO (but co-head of investment banking for Asia-Pacific in 2015) Michael Ormaechea and former head of equity capital markets for Australia and New Zealand, Michael Richardson; and
  • ANZ group treasurer Rick Moscati.

The charges involve alleged cartel arrangements relating to trading in ANZ shares, and each of the individuals is alleged to have been knowingly concerned in some or all of the alleged conduct.

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Deutsche Bank has responded to the news of the charges against Mr Ormaechea and Mr Richardson, saying that it believes the former employees “acted responsibly, in the interests of clients and in a manner consistent with the Corporations Act and ASIC market integrity rules in relation to ANZ’s institutional share placement in August 2015”.

“Both Michael Ormaechea and Michael Richardson are highly regarded and have our full support. We will vigorously defend charges brought by the CDPP and the ACCC,” the statement reads.

It has now been revealed that the court case will be heard on 3 July in Sydney. The matter is listed before the Downing Centre Local Court.

As this is a criminal matter currently before the court, the ACCC has said that it will not be providing further comment at this time.

[Related: ANZ to be charged with cartel conduct]

Cartel case to be heard in court next month
Scales of Justice, cartel case, ANZ, Citigroup, Deutsche Bank
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Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

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