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Criminal cartel case against ANZ, investment banks heading to trial

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CRIMINAL CARTEL CASE AGAINST ANZ, INVESTMENT BANKS HEADING TO TRIAL

By business reporter David Chau
Posted Tue 8 Dec 2020 at 3:46amTuesday 8 Dec 2020 at 3:46amTue 8 Dec 2020 at
3:46am

ANZ is one of three banks committed to stand trial before the Federal
Court.(Reuters: David Gray)
Help keep family & friends informed by sharing this article
abc.net.au/news/anz-citi-deutsche-to-stand-trial-on-criminal-cartel-charges/12961406
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Some of Australia's top bankers from ANZ, Deutsche Bank and Citigroup Global
Markets have been committed for trial on criminal cartel charges.


KEY POINTS:

 * Three banks and six executives face criminal charges after an investigation
   by the ACCC
 * The case was first brought in 2018 and will now proceed to the Federal Court
 * The allegations relate to a $2.5 billion share placement in 2015



The banks and executives John McLean, Rick Moscati, Michael Ormaechea, Michael
Richardson, Stephen Roberts and Itay Tuchman were committed from the NSW Local
Court on Tuesday.

The upcoming trial will be heard in the Federal Court and will relate to
criminal breaches of Australian consumer law.

This case has a long, complex history — starting with a two-year investigation
by the competition watchdog, the Australian Competition and Consumer Commission
(ACCC), and resulting in criminal charges brought by the Commonwealth Director
of Public Prosecutions.

The corporate regulator ASIC also sued ANZ in relation to the alleged cartel
conduct, as part of a separate lawsuit.

Those proceedings have been halted pending the outcome of the case brought by
the ACCC.

The criminal charges relate to ANZ issuing an extra $2.5 billion worth of
shares, in August 2015, which it sold to institutional investors.

The banks and executives have denied the allegations and have been defending the
proceedings since 2018.


ALLEGED COLLUSION ABOUT HOW TO DEAL WITH EXCESS SHARES

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

As is normal in these so-called share placements, the underwriters agreed to buy
any shares that other investors did not want.

Often, there aren't any left over — but this time almost a third of the shares,
worth about $790 million, didn't sell.

That left the three big investment banks with a chunk of ANZ shares they would
eventually need to offload.


WHAT IS UNDERWRITING?

The world of underwriting share sales generally goes on unnoticed in the
boardrooms of big investment banks — at least until the ACCC gets involved with
a criminal cartel court case. But what do underwriters do?


Read more

The allegation made by the ACCC is that the three investment banks and ANZ,
through some of their most senior executives, came to an understanding about how
these shares were to be dealt with.

JP Morgan is not facing charges because it blew the whistle and was granted
immunity.

For companies, the maximum fine for each criminal cartel offence is either $10
million, or three times the total benefits that have been earned and are
"reasonably attributable" to the commission of the offence (whichever is
greater).

If the total value of the benefits cannot be determined, then the maximum
penalty is 10 per cent of the company's annual turnover connected with
Australia.

For individuals, the maximum sentence is 10 years' imprisonment, a fine of up to
$420,000, or both.

Posted 8 Dec 20208 Dec 2020Tue 8 Dec 2020 at 3:46am
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RELATED STORIES


 * ART OF THE FLIP: WHY BANKERS HAVE TURNED SNITCH
   
   


 * ACCC HEADS TO THE TOP AS BANK BOSSES FACE CRIMINAL CARTEL CHARGES
   
   


 * CRIMINAL CARTEL CHARGES EXPECTED TO BE LAID AGAINST ANZ, ACCC CONFIRMS
   
   


 * UNDERWRITING IS AT THE HEART OF THE ANZ CARTEL CASE, BUT WHAT IS IT?
   
   

More on:
 * Australia
 * Banking
 * Business and Industry Regulation
 * Business, Economics and Finance
 * Markets


TOP STORIES


 * AUSTRALIA'S OUTGOING SPY CHIEF HAS KNOWN THE WORLD'S SECRETS FOR FIVE YEARS.
   THESE ARE HIS FEARS FOR THE FUTURE


 * MORE THAN HALF OF AUSTRALIA'S 2.5M DIRECTORS COULD BECOME INELIGIBLE TO RUN
   COMPANIES BY THE END OF THIS MONTH


 * FORMER PAKISTAN PRIME MINISTER IMRAN KHAN SHOT IN ASSASSINATION ATTEMPT


 * AUSTRALIAN CYBERCRIME REPORTS SURGE AS CRIMINAL GANGS WEAPONISE SENSITIVE
   STOLEN DATA


 * JIM CHALMERS TELLS Q+A THERE WILL BE ENERGY COST RELIEF, A REPUBLIC PUSH AND
   THAT A RECESSION IS UNLIKELY


 * BENJAMIN NETANYAHU TO RETURN TO POWER IN ISRAEL AS LEADER OF RIGHT-WING
   ALLIANCE


 * CHINA TO GIFT SOLOMON ISLANDS POLICE WITH NEW EQUIPMENT DAYS AFTER AUSTRALIA
   DONATION


 * NEGATIVE GEARING AND CAPITAL GAINS TAX DISCOUNT SET TO COST THE BUDGET $20
   BILLION A YEAR WITHIN A DECADE

 * analysis
   
   
   ANTHONY ALBANESE WON’T BE AT COP27 BUT ENERGY WILL BE ON HIS MIND


 * THINK FOOD IS TOO EXPENSIVE? EXPERTS SAY WE'RE NOT EVEN CLOSE TO PAYING THE
   TRUE COST


 * 'DE-CONDITIONING' THERAPY TARGETING TRIGGERS OF ONLINE SPORTS BETTING


 * ROLFE THEFT CHARGE NOT DISCLOSED IN NT POLICE APPLICATION, INQUEST TOLD


 * UK RATES HIKED AS BRITS WARNED OF LONG RECESSION


 * THIS HISTORIC GROUP THOUGHT THEY WERE 'FIXING' NATURE. INSTEAD, THEY WERE
   CAUSING IRREVOCABLE DAMAGE


 * HENRY CALLS IT A 'PAIN IN THE BUTT'. ADVOCATES SAY IT'S THE MAIN THING
   KEEPING PENSIONERS FROM PLUGGING AUSTRALIA'S SKILLS GAPS


POPULAR NOW

1.


AUSTRALIA'S OUTGOING SPY CHIEF HAS KNOWN THE WORLD'S SECRETS FOR FIVE YEARS.
THESE ARE HIS FEARS FOR THE FUTURE



2.


MORE THAN HALF OF AUSTRALIA'S 2.5M DIRECTORS COULD BECOME INELIGIBLE TO RUN
COMPANIES BY THE END OF THIS MONTH



3.


FORMER PAKISTAN PRIME MINISTER IMRAN KHAN SHOT IN ASSASSINATION ATTEMPT



4.


HENRY CALLS IT A 'PAIN IN THE BUTT'. ADVOCATES SAY IT'S THE MAIN THING KEEPING
PENSIONERS FROM PLUGGING AUSTRALIA'S SKILLS GAPS



5.


CHRISTIAN MONASTERY — POSSIBLY PRE-DATING ISLAM — FOUND OFF UAE'S COAST



6.


A RIDE HOME AT 3AM ALREADY COST TENAYAH $110. THEN THE DRIVER DEMANDED MORE CASH





TOP STORIES


AUSTRALIA'S OUTGOING SPY CHIEF HAS KNOWN THE WORLD'S SECRETS FOR FIVE YEARS.
THESE ARE HIS FEARS FOR THE FUTURE




MORE THAN HALF OF AUSTRALIA'S 2.5M DIRECTORS COULD BECOME INELIGIBLE TO RUN
COMPANIES BY THE END OF THIS MONTH




FORMER PAKISTAN PRIME MINISTER IMRAN KHAN SHOT IN ASSASSINATION ATTEMPT




AUSTRALIAN CYBERCRIME REPORTS SURGE AS CRIMINAL GANGS WEAPONISE SENSITIVE STOLEN
DATA




JIM CHALMERS TELLS Q+A THERE WILL BE ENERGY COST RELIEF, A REPUBLIC PUSH AND
THAT A RECESSION IS UNLIKELY




BENJAMIN NETANYAHU TO RETURN TO POWER IN ISRAEL AS LEADER OF RIGHT-WING ALLIANCE




CHINA TO GIFT SOLOMON ISLANDS POLICE WITH NEW EQUIPMENT DAYS AFTER AUSTRALIA
DONATION




NEGATIVE GEARING AND CAPITAL GAINS TAX DISCOUNT SET TO COST THE BUDGET $20
BILLION A YEAR WITHIN A DECADE


analysis


ANTHONY ALBANESE WON’T BE AT COP27 BUT ENERGY WILL BE ON HIS MIND




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