Federal prosecutors on Friday (Feb. 11) dropped criminal charges against Citigroup, Deutsche Bank and four senior bankers related to a “significant cartel case” by the Australian Competition & Consumer Commission (ACCC), ending a case that dates back to August 2015, The Financial Times reported.
The case was scrapped after the commission realized it was unlikely to secure convictions, the report says, avoiding one of Australia’s largest white-collar criminal trials. Related charges against Australian bank ANZ and two senior bankers were dropped last year.
The cartel case ties into a share placement by ANZ in August 2015 and phone calls between the banks that had underwritten the A$2.5 billion ($1.8 billion) fundraising round, including discussions about future plans to sell the remaining stock on their books.
The ACCC alleged that the bankers’ actions were tantamount to “cartel behavior,” while the banks said the trades complied with Australian regulatory guidelines and were part of an established process of stabilizing the market after a large placement.
JPMorgan, which worked on the ANZ placing, was not charged because it cooperated with the ACCC, a person with direct knowledge of the situation said.
The ACCC filed criminal charges in June 2018 against the banks and bankers, including the former head of Deutsche Bank in Australia, Michael Ormaechea, and the former head of Citigroup Australia, Stephen Roberts. They faced 10 years in jail if they were convicted in the case.
ACCC chair Rod Sims said the bankers’ alleged actions “stood to damage competition and the Australian economy” and that the agency would pursue similar charges if other cases of that type come along.
A spokesperson for Citigroup said the bank welcomed the decision to drop the charges. “Since 2018, Citi has steadfastly denied the allegations and is looking forward to putting this matter behind us,” she said.
Deutsche Bank said the dropping of the charges “vindicated” the bank and its executives.
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In August, the National Bank of Australia (NAB) bought Citigroup’s local consumer unit for about $882 million, putting more than 90% of Australia’s credit card industry under the care of the country’s four biggest banks.
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In November 2020, Deutsche Bank opened a cash management business in Australia.
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