Criminal cartel case against banks dropped

The Commonwealth Director of Public Prosecutions (CDPP) has dropped the charges against the remaining players alleged to have been involved in cartel offences arising from an ANZ institutional share placement in August 2015.

The charges were dropped after the CDPP, Sarah McNaughton SC, found that there “were no longer reasonable prospects of conviction for the charges before the court”.

As such, the criminal prosecutions against Citigroup Global Markets Australia Pty Limited (Citigroup), Deutsche Bank AG and the four remaining senior banking executives (John McLean and Itay Tuchman of Citigroup, and Michael Ormaechea and Michael Richardson formerly of Deutsche Bank) have been withdrawn.

It means that all the charges brought against the relevant parties alleged to have been involved in the ANZ institutional share placement (bar JP Morgan, which was reportedly granted immunity from the proceedings as a result of whistleblowing) have now been discontinued. 

The charges against ANZ and its former group treasurer Rick Moscati were dropped in October 2021 and those against former Citi Australia chairman Stephen Roberts were dropped in August last year.

Speaking on Friday (11 February), Berdj Tchakerian, the deputy director (commercial, financial & corruption) at the CDPP, said: “All decisions relating to the conduct of federal criminal prosecutions are made in accordance with the Prosecution Policy of the Commonwealth, including any decision to discontinue a prosecution already commenced. Prosecutors apply the Prosecution Policy of the Commonwealth at all stages of the prosecution process to ensure that proceedings continue to be adequately supported by admissible evidence and continue to be in the public interest.  

“In this case, following a further careful review of the evidence and consideration of detailed submissions received from solicitors acting for the accused, the director concluded that there were no longer reasonable prospects of conviction for the charges before the court.  

“This resulted in the director’s decision to decline to proceed further in the proceedings against the remaining defendants in this complex matter.”

Following the decision, ACCC chair Rod Sims said: “We respect the independent decision of the CDPP, and with them will consider what lessons can be learnt from this matter.

“Cartel conduct involves businesses acting together instead of competing fairly with each other. We considered that the alleged conduct stood to damage competition and the Australian economy. That is why the ACCC investigated this conduct and referred the evidence to the CDPP. 

“The Office of the CDPP assessed the evidence very carefully and, as required by law, made an independent decision to prosecute based at all times on an application of the Prosecution Policy of the Commonwealth.”

Mr Sims continued: “When competition is impeded, this usually results in increased prices for other businesses and consumers, and the ACCC will take action when it has reason to believe businesses are acting anti-competitively.

“While there can be challenges involved in bringing criminal cartel prosecutions, particularly due to the complexity of the cartel laws, we will continue our efforts to deter, detect and dismantle cartels, and will continue to refer serious cartel conduct to the CDPP for its consideration. 

“That is our role and we will continue to fulfil it, even though not all briefs of evidence given to the CDPP will result in the laying of charges or convictions.”

Background to the case

The legal proceedings were initiated in 2018 following an investigation made by the Australian Competition & Consumer Commission (ACCC). 

The investigators from the ACCC alleged that there were cartel arrangements relating to trading in ANZ shares held by Deutsche Bank and Citigroup. ANZ and each of the individuals were alleged to have been knowingly concerned in some or all of the alleged conduct, which reportedly took place following the ANZ institutional share placement in August 2015.

Following a referral to the CDPP, the three banks and six senior banking executives were charged on allegations of cartel conduct in relation to the supply of the 80.8 million shares in August 2015.

Speaking last year when the ANZ charges were dropped, ANZ’s chief risk officer Kevin Corbally said: “We maintained all along ANZ acted in accordance with the law in relation to the placement. We defended the bank and Rick on that basis and we are pleased the matter is now behind us."

[Related: Banks up for trial on criminal cartel charges]