Citibank, Deutsche Bank, ANZ to Fight Possible “Criminal Cartel” Charges in Australia

There’s unconfirmed speculation JPMorgan may have been granted immunity as the whistleblower.

By Charles Benavidez,

Amid an ongoing investigation in Australian banks, insurers, financial service providers and pensions funds for everything from rate-rigging to mistreating customers and questionable consumer lending practices, two major global banks are now facing criminal charges in the country.

Prosecutors are now expected to lays “criminal cartel” charges against Citigroup, Deutsche Bank and the Australian bank (ANZ) over a $1.9-billion share of ANZ’s stock, according to the Australian Competition & Consumer Commission (ACCC)

More specifically, the Commonwealth Director of Public Prosecutions is expected to charge the three banks and a number of individuals over “alleged cartel arrangements relating to trading in ANZ shares following an ANZ institutional share placement in August 2015”, ACCC chairman Rod Sims was quoted as saying.

ANZ group treasurer Rick Moscati is among the individuals expected to be charged, and it comes at an unfortunate time: He is slated to become ANZ’s chief risk officer. Australian media have speculated that a recorded video conference all with Citigroup and DB discussing the share sale.

ANZ said the charges related to the placement of 80.8 million shares, which were a subject of underwritten deal by global giants Deutsche Bank, Citigroup and JP Morgan as a part of a bid by ANZ to raise capital to meet tough new regulatory requirements that would have forced them to inject billions of dollars into their mortgage books and boost capital to “unquestionably strong” levels.

There is also unconfirmed speculation that JP Morgan may have been granted immunity from the alleged criminal cartel proceedings as the whistleblower.

The Australian Securities and Investments Commission is now investigating whether ANZ’s announcement should have explicitly stated that the joint lead managers took some 25.5 million shares of the placement, representing approximately 0.91% of total shares on issue at that time.

In other words, the underwriters ended up with almost $800 million in ANZ shares.

The three banks have announced plans to appeal the charges and deny any wrongdoing in the deal.

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

“The bank believes it and its staff acted responsibly and in a manner consistent with market rules,” Deutsche Bank said.

ANZ also believes it “acted in accordance with the law” and intends to defend itself and treasurer Moscati.

ANZ expects the charges to be filed this week.

According to Australian media, the three companies could face a maximum penalty of 10 percent of annual turnover, or three times the benefit gained from “criminal cartel” behavior. Individuals could face up to 10 years in prison.

These are tough days for Australia’s banks, which are facing heightened scrutiny against the backdrop of mounting allegations of abuse.

On Monday, the Commonwealth Bank of Australia negotiated a A$700 million ($529.3 million) settlement of an anti-money laundering case against it brought by Australia’s financial intelligence agency. By Charles Benavidez,

The War on Cash suffers a setback. Read…  Visa Goes Down in the UK, Chaos Ensues, Cash is Suddenly King

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  17 comments for “Citibank, Deutsche Bank, ANZ to Fight Possible “Criminal Cartel” Charges in Australia

  1. Javert Chip says:

    Citi used to be one of the US banks involved in almost every significant bit of questionable banking anywhere in the world.

    Then 2008-9 happened, and Citi just seemed to stay at home in the USA, paying huge fines and complaining about their severely under-valued stock price (bank market cap less than bank book value usually indicates shareholders and potential investors simply don’t believe the numbers.


    Ahhhh…the good old days.

  2. Lee says:

    No comment as the article says it all.

  3. William Smith says:

    Aus has a conservative (“Liberals”) govt which fought kicking and screaming for many years to block a Royal Commission (which can ask *any* questions and nobody can refuse to answer) into bank bastardry. Even the “regulator” is seen as relatively powerless and deliberately underfunded. Due to overwhelming evidence annoyingly popping up here and there, they were forced to allow the Royal Commission. The conservatives are obviously “friends” of the big end of town and the legal process will be deliberately protracted. When the dust finally settles in many years everything will be quietly swept under the carpet. No banksters will be going to jail and we will continue to find the same names popping up in boardrooms. Even if the opposition gets into power nothing will happen as the (current) opposition leader has been documented as wining and dining with the “upper crust” in their mansions in Toorak (elites suburb in Melbourne). The whole lot of them, on both sides are bought. Aus needs a Trump type to shake things up as well if there is to be any hope of change. The natives are sick of getting screwed by the banks and are getting restless, even in relatively apathetic aus. The standard apology of “we need a healthy banking system for the economy” is beginning to sound quite hollow as scandal after scandal is being uncovered by the Royal Commission (Ie. dodgy business loans to pensioners, using bank-forged fraudulent documentation). The practices of Wells Fargo are alive and well in aus. The only people who are “healthy” are the banksters and share holders. Joe Public is screwed.

    • James Levy says:

      Trump is doing his level best to deregulate, i.e. empower new and better frauds, our banks, so trust me, a Trump you don’t need.

      What’s killing us all is that the productivity gains of the 1960s and 1970s were quite sufficient to make mass produced material goods only marginally profitable, even with Third World labor. So Capitalists turned to financialization as a means of upping their profit margins, as usury is a really good way to accumulate wealth. Now, the rich in every developed country want in on the financialization game, as it is way easier and more profitable than rolling out a new product line or inventing and marketing a new device. The ugly truth is that there just isn’t a ton of money in producing things anymore, which is why the West sent their production infrastructure to China and the Third World. The real money is in playing with money (including asset pumping and dumping, as in real estate), whether in Australia, Britain, or the USA.

  4. peter says:

    And when I want to borrow anything of a bank, I have to show I am legal and above board and secure everything a zillion times over. WTF? I think it’s time the banks have to show us that we are dealing with a legal entity. Which they can’t. And quite right William Smith, nothing will change all the time the politicians keep supporting the banks and vice versa.
    Of course, if everyone refused to pay their mortgage for just one months, en mass, imagine what that would do! Call them all in? I think not. But of course people won’t as we’re all sheeple.

    • sierra7 says:

      The “People” do not realize the power they have. If they did we would have a much better society. History can show graphically what happens when the “common folk”, “organize, organize, organize”. That’s how we got ALL our social benefits are being trashed today. The “People” could shut down this country overnight…….but, they are scared and have forgotten how to fight back.

  5. Gershon says:

    Meanwhile, the biggest criminal cartel of all, the central banks, defraud the 99% with impunity.

  6. Ambrose Bierce says:

    More evidence of a rip in the fabric of global banking cooperation. Can’t wait to see how DB in the US is resolved

  7. raxadian says:

    These guys are the true Maggia. Meanwhile Italians banks are sinking like paper boats on the river, the EU is imitating certain three monkeys when it comes to their own corruption while bringing the hammer to US tech companies and mo one knows when junk debt hungry zombie companies like Netfix will finally get it.

    • James Levy says:

      Sometimes it feels like reality itself is in a state of suspended animation. We all know that the system is no longer ecologically, politically, or economically viable, but with tons of inertia and nothing to replace it all with the thing just keeps chugging along like a demented energizer bunny. Historian Adrian Goldsworthy stresses this about Rome: the empire was so big compared to its rivals, and had such vast resources at its disposal, that it lumbered along for decades, perhaps as much as two centuries, on fumes and the fact that it had been around so long that no one could imagine the world without it.

  8. don says:

    It was not the best of times or the worst of times, it was not the best bank or the worst bank, it was the age of science and the age of idiots, the epoch of humans and the age of chicks with dicks, it was the age of enlightened elites and the age of credulous fools and nincompoops, the cold age of disenchantment and the hot summer of discontents.

  9. Kasadour says:

    Chase, a three-time convicted criminal bank itself, ratting out Citi, DB and ANZ- oh, that’s hilarious.

    $800 million is a huge chunk of change. If this crime were committed in the United States, the DOJ would be encouraging this type behavior as business as usual. Protect the con-men and rackets at any/all cost to the taxpayers.

  10. nick kelly says:

    Kind of funny that JP may have ratted out the rest in return for a break, Just like a mafia rat.
    Up here in Canada there is MAJOR bad blood between the major bakers of bread of all things, and the one who ratted about the cartel agreement to raise prices.

    Loblaw, by way of apology, gave out 25 $ certificates. But a loaf has been edging towards 5 $ for years. So if the cartel was able to keep prices up by one dollar, and a family buys just one loaf a week, in six months, the 25 $ certificate looks not so expensive.

    And if the family buys TWO loaves a week….

    Who would have suspected bread as part of a price- fixing cartel?

  11. Lee says:

    ” Aus needs a Trump type to shake things up as well if there is to be any hope of change.”

    Unfortunately that will never happen here as a result of the party structure in Australia. Neither the Libs nor Labs would ever let a person like Trump into a position of power.

    “The natives are sick of getting screwed by the banks and are getting restless, even in relatively apathetic aus.”

    Yes, the banks here screw their customers because………………THEY CAN (Aussies with understand those two words).

    Since the GFC the spread between the RBA discount rate and the rate on variable mortgage loans has blown out by something like 250 basis points.

    The banks managed to do this by increasing rates more when the RBA increased rates, lowered them by less when the RBA cut rates, and by having out of cycle rate increases.

    Huge flow of funds from people to the banks for paying that extra spread. On a A$300,000 loan that works out to about A$600 a month extra being siphoned off by the banks that could go to other spending or savings. That is the reason why Australian bank shares performed so well since the GFC.

    There is basically no competition for mortgages in Australia, but then again there is very little real competition here in many sectors.

    We pay huge prices for most everything compared to other parts of the world and it is called the “Australian Premium”.

    I’ve posted about this before. Bananas grown here in Australia are more expensive than bananas in Japan even though Japan imports them and then distributes them though its famous networks. Eggs here cost more than in Japan.

    Car parts? Extraordinary, huge, ridiculous prices for spare parts compared to the USA.

    Paper towels, tissues, toilet paper – the list goes on.

    Even houses are more expensive in Australia than in many places in Japan.

    Travel? The cost of hotels here is ridiculous with high prices and poor service.

    Electricity prices are the same. (But you can now get a 5.6kW solar power system for about A$6000 here in Victoria….). You should see the number of houses with panels in some neighbourhoods here.

    But wait, the government’s solution to ‘help’ out? Yep, screw the consumers by placing a 10% GST on any import by mail. Starts 1 July.

  12. R Davis says:

    The operative words here are: granted immunity.
    I shudder to think what the real story of Criminal Deviance is.
    A Royal Commission cost money.
    It is really an expensive white wash.
    It also shunts worthwhile monies to the legal arena for its loyalty to the cause.
    The Government announces a Royal Commission –
    To which the legal arena shout, “there is a god.”

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