Criminal cartel charges laid against ANZ, Citigroup and Deutsche Bank executives

The Australian Competition and Consumer Commission (ACCC) has formally laid criminal cartel charges against the ANZ, Citigroup, Deutsche Bank and six senior executives.

Those charged include ANZ's global head of treasury, Rick Moscati, and the former chairman of Citigroup's operations in Australia, Stephen Roberts.

The charges relate to the sale of $2.5 billion ANZ shares to institutional investors in August 2015.

The sale was organised and underwritten by Citigroup, Deutsche Bank and third big global bank JP Morgan to boost ANZ's balance sheet in accordance with demands from the bank regulator APRA.

JP Morgan has not been charged.

Apart from Mr Moscati and Mr Roberts, those charged include Citigroup's current managing director John McLean and global head of foreign exchange trading Itay Tuchman as well as Deutsche Bank's former Australian chief executive Michael Ormaechea and Michael Richardson, who has also left the bank.

The three banks all strenuously deny the allegations and say they will vigorously defend themselves and their employees.

In an earlier statement Citi said there was no precedent for the action and there had been no guidance notes issued by the ACCC to the banks over their underwriting activities.

Two year investigation

The ACCC and the Australian Securities and Investments' Commission have been investigating the disposal of about $790 million worth of shares the banks did not manage to sell in the initial auction to big institutional investors on August 6, 2016.

At the time, the market had not been informed about the overhang of unsold stock.

"This is a highly technical area and if the ACCC believes there are matters to address, these should be clarified by law or regulation or consultation," Citigroup said.

"Underwriting syndicates exist to provide the capacity to assume risk and to underwrite large capital raisings, and have operated successfully in Australia in this manner for decades."

ACCC chairman Rod Sims said: "These serious charges are the result of an ACCC investigation that has been running for more than two years.

"Charges have now been laid by the Commonwealth Director of Public Prosecutions and the matter will be determined by the court."

The matter is listed before the Downing Centre Local Court in Sydney on July 3, 2018.

Under the Competition and Consumer Act, individuals found guilty face up to 10 years in jail and/or fines of up to $420,000 per criminal cartel offence.

Institutions face fines of up to $10 million per offence.

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