ANZ, Deutsche Bank, Citigroup face criminal cartel charges
White Collar June 1, 2018 9:57 am By Christine Caulfield | Melbourne
ANZ, Deustche Bank and Citigroup will be hit with criminal charges over an alleged cartel involving the institutional equity placement of ANZ shares that raised $2.5 billion in capital.

The charges by the Director of Public Prosecutions involve an arrangement or understanding made between the joint lead managers of ANZ’s underwritten institutional equity placement of 80.8 million ordinary ANZ shares in August 2015.

ANZ is charged with being knowingly concerned in the alleged cartel conduct. Deutsche Bank, along with Citigroup and a number of individuals, including ANZ group treasurer Rick Moscati, will also be charged.

“We believe ANZ acted in accordance with the law in relation to the placement and on that basis the bank intends to defend both the company and our employee.” chief Risk Officer Kevin Corbally said in the statement to the Australian Stock Exchange.

A spokesperson for Deutsche Bank did not immediately respond to requests for comment Friday.

Citigroup said it “steadfastly denies” the allegations and that it would vigorously defend the charges. It indicated the ACCC was moving into unchartered territory in recommending the charges.

“The allegations involve an area of financial markets activity that has not been considered by any Australian court or addressed in any regulatory guidance notes previously published by the ACCC or the Australian Securities and Investments Commission (ASIC). 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.

The charges follow an extensive investigation by the Australian Competition and Consumer Commission.

“The charges will involve alleged cartel arrangements relating to trading in ANZ shares following an ANZ institutional share placement in August 2015,” ACCC Chairman Rod Sims said in a statement. “It will be alleged that ANZ and the individuals were knowingly concerned in some or all of the conduct.”

ANZ is also co-operating with a separate investigation by the Australian Securities and Investments Commission (ASIC) in relation to the placement.

ASIC is investigating whether the bank’s announcement on August 7, 2015 should have stated that the joint lead managers took up approximately 25.5 million shares of the placement, representing 0.91% of total shares on issue.

The share placement was limited to institutions and professional investors, the bank said at the time. ANZ did not seek shareholder approval for the issue.

The bank said it did not intend to provide further comment.

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Christine Caulfield

Christine Caulfield has been a journalist for 18 years. She was most recently the Co-Managing Editor at US legal news publication Law360. Prior to that she worked as the County Court reporter for The Herald Sun. She is Co-Founder and Editor of Lawyerly.