Deutsche Bank AG, Citigroup Inc. and Australia & New Zealand Banking Group Ltd. face criminal charges in Australia for alleged cartel conduct over a sale of shares of A $ 2.5 billion ($ 1.9 billion) almost three years ago
The charges related to the trading of shares of ANZ Bank after its institutional placement in August 2015, the Australian Competition and Consumer Commission said in a statement on Friday, naming the Melbourne-based lender and two of the agreement's subscribers.
"It will be alleged that ANZ and the individuals were knowingly or partially concerned about all of the conduct," said ACCC President Rod Sims. "The expected charges follow a broad investigation of the ACCC criminal cartel."
The three banks said they had complied with the market rules and will defend the accusations.
The sale was aimed at raising ANZ Bank's capital reserves while the nation's creditors scrambled to comply with the new regulatory requirements . According to Citigroup, a criminal case would be an unprecedented incursion by prosecutors in an area of Australia's capital markets that has successfully used underwriting guilds for decades.
The Australian Securities and Investments Commission, the market regulator, is also investigating whether ANZ Bank should have indicated at the time that the joint lead managers took approximately 25.5 million shares in the placement. That was almost a third of the sale of shares and 0.9 percent of the total shares of ANZ at that time.
& # 39; Strong case & # 39;
Such a prosecution "is almost unique," said Andrew Grant, who specializes in banking at the University of Sydney Business School. "Resorting to criminal charges against ANZ and others would suggest that the authorities feel they have a particularly strong case."
Read more about allegations of irregularities committed by Australian banks
The accusations, which sent shares of ANZ Bank down Sydney's trade, adds to a litany of problems for the banking industry in Australia. An investigation into misconduct in the financial industry has revealed extensive irregularities, from lying to regulators, forging documents and accepting bribes, to extracting fees from long-dead clients. ANZ Bank paid last year A $ 50 million for settle the allegations that it rigged a benchmark interest rate.
ANZ Bank fell 1.2 percent to A $ 26.89 at 1:12 p.m. local time, valuing the lender at $ 78 billion.
Shedding more light on the charges expected, ANZ Bank said in a statement that the procedures relate to an "arrangement or understanding allegedly made between the joint principal managers" about the ANZ Share supply. The lender said he believes he acted in accordance with the law and intends to defend himself and group treasurer Rick Moscati, who also faces charges.
Citigroup said the allegations involve a "highly technical area" that has not been previously considered by an Australian court or addressed by regulators.
"If the ACCC believes that there are issues to address, they should be clarified by law or regulation or consultation," Citigroup said.
In its statement, Deutsche Bank said that it takes the conduct matters "extremely seriously" and has cooperated fully with the ACCC during the investigation process.
"The bank believes that and its staff acted responsibly and consistently" with the rules of market integrity, he said.
The shares of ANZ Bank fell 7.5 percent on August 7, 2015, one day after it announced the placement. At that time, that was the biggest drop in almost seven years.
Institutional placement was completed at A $ 30.95 per share, with a 5 percent discount to the previous closing price.
The ACCC has said that it only expects ANZ Banco, Citigroup and Deutsche Bank in charge. The third subscriber of the agreement, the local arm of JPMorgan Chase & Co., declined to comment.