Criminal cartel charges laid against ANZ, Citigroup and Deutsche Bank

“It will be alleged that ANZ and the individuals were knowingly concerned in some or all of the conduct,” ACCC chairman Rod Sims says.

UPDATE: / June 6: Citigroup, Deutsche Bank and ANZ have been charged with criminal cartel offences following an investigation by Australian watchdog the ACCC.

Criminal charges have also been laid against several senior executives: John McLean, Itay Tuchman and Stephen Roberts of Citigroup; Michael Ormaechea and Michael Richardson formerly of Deutsche Bank; and Rick Moscati of ANZ.  

See more details on the charges in NBR's initial report below.

Separately, an agreement has been reached between a second Australian regulator, Austrac and CBA (parent of ASB) for a record $A700 million penalty to resolve Federal Court proceedings relating to serious breaches of anti-money laundering and counter-terrorism financing (AML/CTF) laws.

EARLIER / June 1: ANZ faces criminal cartel charges
ANZ Banking Group says it will defend legal action planned by Australia's Commonwealth Director of Public Prosecutions over alleged criminal cartel conduct relating to a $A2.5 billion share placement in 2015.

The expected charges follow an investigation by the Australian Competition and Consumer Commission and will include legal proceedings against ANZ Group treasurer Rick Moscati, two other companies and a number of other individuals. 

“It will be alleged that ANZ and the individuals were knowingly concerned in some or all of the conduct,” ACCC chairman Rod Sims said in a statement.

ANZ said ASIC is investigating whether its announcement of August 7, 2015, which announced the placement had been completed, should have stated the joint lead managers took up approximately 25.5 million shares of the placement, representing approximately 0.91% of total shares on issue at that time.

Citigroup, Deutsche Bank and JP Morgan were the three investment banks who worked on the capital raising in August 2015, the AFR reports.

The ACCC has now confirmed Deutsche Bank AG as one of the two other companies against which charges are expected to be laid. The other is Citigroup.

"The proceedings relate to an arrangement or understanding allegedly made between the joint lead managers in relation to the supply of ANZ shares," ANZ said.

ANZ chief risk officer Kevin Corbally said: "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."

ANZ said it would not provide further comment.


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38 Comments & Questions

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WOW!!!!!! Look at the familiar names, Deutsche Bank, J.P Morgan, and Citgroup. One has to wonder where Goldman Sachs might be. I wonder if this will have any effect on the NZ regulators

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Does NZ have regulators? Oh you mean effective regulators. Sorry my mistake.

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ANZ are Charging Kiwis too much for mortgages ! In the UK you can get mortgage rates below 2%.

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That's because the rates in the UK are so much lower than ours are. Good try though.

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"It will be alleged ................" But already Mr Waterhouse and others declare them guilty.
Let us wait for the trial outcome, and if ANZ are found innocent I hope they go after those that have gone out of their way to libel and defame ANZ and their staff.

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Good luck.

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"All three banks denied wrongdoing and vowed to defend the charges, with Citigroup saying the regulator was effectively criminalizing practices long seen as the norm in the financial industry."
SO! When is the trial? Have the charges been laid? Let's bring it on regulators you have talked enough.
What is the bet that in the end the taxpayer funded legislators will chicken out with some lame excuse for their lack of understanding how underwriting really works.
In the meantime may I suggest that our regulators look at the ethics of "private financial experts" pushing their clients into buying shares in companies that they themselves own shares in. Will they? No, not as "sexy" as going after big banks, big power companies and big telecoms. Hounding these successful companies is much more popular with the economic ignorant.

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So charges laid....in terms of regulators going after the big boys rather than the small guy maybe part of that is the size of the impact. A financial advisor getting a $100k investment from say 10 people verses $100m from a 1,000 i know where the effort should be.

In the past of course they hit the little guy because that was easier.

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You're absolutely right...in nz the regulator has focused on small businesses yet 99 percent of the damage is done by the vertically integrated rip off cartel.

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More from AFR on ANZ. Investment bank "JPMorgan is believed to have been granted immunity from alleged criminal cartel conduct relating to a $2.5 billion share placement for ANZ Banking Group in 2015, after blowing the whistle on ANZ, Deutsche Bank and Citigroup." Interesting eh? Another example of "a rodent deserting a slowing submerging maritime transportation vehicle?"

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I'm now using Bank of Mattress

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Enjoy the non return on your money.

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Few years back all the guarantees on bank $ slipped away
Low interest not a silly move

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LOL! You and quite a few others. I don't know if you have seen this, "Deutsche Bank's credit rating was downgraded on Friday, delivering another blow to Germany's biggest bank.The downgrade by S&P followed reports that the Federal Reserve had labeled the bank's US business "troubled," news that sent its shares tumbling Thursday to a record low" I put a comment on the "regulators see no evidence for enquiry" article. Could there be a thread? Might there soon be concern about another type of enquiry? At least by using "Bank of Mattress" if/when New Zealand bank(s) goes under and the RBNZ implements its OBR Plot those with money in the Bank of Mattress will be much better off than those with "digits" in the other banks.There is approximately $4 Billion in notes and coins in New Zealand whereas there are BILLIONS in "digit" money which can/will disappear at the stroke of a few bankster computer keys as opposed to the stroke of a bankster' pen, in the old days.Remember what happened in Cyprus? NZ, of course, has no deposit insurance, which would be a joke anyway, so they will come for depositors' money from the first dollar.

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At last "The Bank of Mattress" is immune to S&P downgrades, unlike some

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Always gets money back
Greatest interest rates in forthcoming deflation (the climate change of banking)

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The afr says that the accc must believe it has a very strong case as its file criminal versus civil charges.it Also makes the point that jp Morgan obviously think that there is a case as that's why they have spilled the beans for immunity.

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Exactly Brent. I understand that Deutsche bank is the largest holder of Derivatives, some US$60 BILLION. I believe it was Warren Buffet who described Derivatives as "Weapons of mass finanical destruction" Makes you/me wonder if Deutsche Bank will be the first next domino. What do you think?

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You know Brent, I got to thinking after reading your comment. The share transaction, if I remember correctly, was in 2015 and now, some 3 years later well after the event, charges, and CRIMINAL to boot, are being laid. I would imagine that some "investigation" would have been done by the ACCC before bringing the charges, and I DON'T imagine tht it was done overnight. Let's go back to the CBL case, what an apparent difference in regulator response/reaction. I first "blew the whistle" on CBL back in 2005 to the SFO. They "investigated" for a couple of years or so and then handed it off to the State of Georgia.All was quiet until I "blew the whistle" again in 2013-2014, this time to the RBNZ, who were satisified that they had done a good job with their "robust 3 year investigation. End of story until 2015 when I "blew the whistle" for the THIRD time, this time to the FMA BEFORE CBL went public, same result as with RBNZ. I really do have to think that CBL had "minders" until things reached the point where something HAD to be done, but well after the horse had bolted. I have to wonder if the same would have happened had it been in Australia

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More Musical Chairs?"More from AFR "How's the friendship going, ANZ and JPMorgan?""And then there are the people moves. Last year alone JPMorgan's former head of investment banking Grant Dempsey moved to ANZ to help with the bank's own M&A plans, while JPMorgan's former banks analyst Scott Manning took a job as chief financial officer at ANZ Australia."
I wonder who will be left standing when the music stops

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I assume the RBNZ had no idea ANZ were being investigated and no investigation of Bank practice in NZ is required because the Australian Banks totally respect NZ regulations and adhere to them strictly. This preserves NZ lack of corruption standing because there is no corruption if you don't look for it and ignore evidence when presented.

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An Australian academic sent me an email the other day characterising nz bank regulation as "hear no evil,see no evil".

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It's not just the RBNZ that ignores evidence, the FMA also does it. You may recall my comments about CBL here on NBR. The RBNZ ignored irrefutable evidence about CBL in 2013-2014 and the FMA ignored irrefutable evidence in 2015 BEFORE CBL went public which, if they had ACTED on, instead of IGNORING, would have prevented CBL going public and the present situation with CBL would have bee avoiided. Interesting that neither the RBNZ nor FMA have made any statement or comment on it.

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They may not even know that it's happening. Has anybody bothered to call them to let them know? They're very busy people you know, what with salary negotiations, and newspaper financial advice blogs and the like.
Like I said, they're very busy people.

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Biiiig vote catcher
Otherwise government soup kitchens for retirement

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Well something really is rotten in the state of Australian banking - and financial services in general. Could never happen here of course (Cough).

As for Deutsche Bank - look out below and everywhere else...

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This is a huge meltdown coming coming where public expected to take another earthquake / leaky homes haircut
Time to see if any substance to Grant Robertson

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This reminds me of the HSBC case in the US several years ago. $700Mil AUD fine for the breach is a slap with a wet bus ticket for these firms. HSBC had to pay a $1.9 BILLION USD settlement and that was still a pittance as far as the bank was concerned.

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Big fines are not a real deterrent to the individual(s) as the business (bank) pays. Need to jail some of these "managers" fora real effect on their behaviour.

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Putting them in jail costs money, and would possibly be a deterrent. If they don't play up there isn't going to be any millions of fine money in it for the govt. It's just too good a payday for them.

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Yes big fines are paid by shareholders.the best way to change bad behaviour is to concentrate the punishment on the perpetrators ie management.

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Before the smoke bursts into flame ....lets have a full bank inquiry in NZ.
It will be far too late if we see the flames before the RB and Government wake up to the bank corruption we have in NZ.
Too bad the reserve bank wants to keep the water calm instead of ruffling a few feathers and stirring this up .
It will return to bite them unless they wake up soon and do what is right by the banking clients

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You and all the rest of us know that it's never going to happen. In NZ we only do something after it happens.

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Is ignoring the NZ crimes criminal in itself?

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It seems that you, and a few other "know-it-alls", know for certain that crimes have been committed. SO, why aren't you all reporting these crimes you know for sure have been committed, to the appropriate authorities for prosecution?

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Can do budgetting advice in prison

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One thing that surprises me is that despite all the publicity that farmers have been getting here recently about debt levels, suspect "interest swap" mortgages,Janette Walker's piece about "farmers' fear of banks," and the interview with Mr Hoggard they don't seem to want to do anything to support an Australia type enquiry here. I wonder why that is, any thought anybody? I still firmly believe that PPI (Personal Protection Insurance) is the banksters' Achilles Heel and would provide the back door to a full blown enquiry. I would bet my daily pinta that many farmers got "mis-sold" PPI and if a survey was done by Federated Farmers, for example, asking how many of their members, families and friends had PPI, especially the ones that were self employed, unemployed, students and retirees, it would provide serious ammuntion to force the regulators to hold an enquiry

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Actually , These and many Other massive companies have a knack
1. Use Call center in Uphills
2. Transfer to India -- They will talk until you fall asleep
3. They will try and sell you insurance
4. They will awoid <=== note accent... prosecution I'm telling you
5.Mr Small Guy -- You have no chance
6.Please Hold .. You are being tranfered to an Automatic voice google AD WORDS system
7. GOD HELP ME
8. LUCKY CHINESE
9. 9 is a six upside down THE DEVIL IS IN THE MONEY
10. GOOGLE AD WORDS !! LOOK OUT THEY WILL GET YOU ~!

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