This article is more than 2 years old

This article is more than 2 years old

The ANZ bank, as well as Citigroup and Deutsche Bank, are expected to face criminal cartel charges after an investigation from the Australian Competition and Consumer Commission.

The expected charges relate to the bank’s $2.5bn capital raising in late 2015.

The ANZ group treasurer, Rick Moscati, two other companies and a number of other individuals are expected to face charges from the Commonwealth Director of Public Prosecutions over “alleged cartel arrangements relating to trading in ANZ shares following an ANZ institutional share placement in August 2015”, the ACCC chairman, Rod Sims, said on Friday.

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

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



Later on Friday the ACCC confirmed that Deutsche Bank and Citigroup Global Markets Australia are the two other companies expected to be charged, as well as a number of individuals.

ACCC says corporate fines too low and it will pursue penalties in the 'hundreds of millions' Read more

The Australian Securities and Investments Commission is also investigating whether ANZ’s announcement 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.



The equity raising came after regulators said in 2015 that Australia’s big four banks would have to inject billions of dollars into their mortgage books and boost overall capital levels to “unquestionably strong” levels.

In a statement to the Australian Stock Exchange the ANZ’s chief risk officer, Kevin Corbally, said the bank would defend the charges.

“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,” Corbally told the ASX.

Deutsche Bank said it intends to vigorously defend those charges.

“Given this is a legal matter, we will not be providing any further comment at this time,” Deutsche Bank said in a statement.

“We take conduct matters extremely seriously and have co-operated fully with the ACCC during the investigation process.

“Financial markets are highly regulated under the Corporations Act and ASIC market integrity rules. The bank believes it acted responsibly and in a manner consistent with those rules.”

Citigroup said it “steadfastly” denies the allegations, and said they “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”.

“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.” the bank’s head of corporate affairs Guy Matthews said in a statement.

Citigroup said 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 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,” Citi head of corporate affairs Guy Matthews said in a statement.

“Citi will vigorously defend these allegations on behalf of itself and its employees,” he said.

“Any such allegation should be considered in the context that ANZ’s shares are bought and sold freely by thousands of shareholders in volumes representing hundreds of millions of dollars every business day, including for the period in question,” Matthews said.

“Citi and its employees acted with integrity and without any bad intent in fulfilling the obligations of this underwriting agreement.”