Ex-Citi, Deutsche Bank Australia Heads to Face Cartel Trial

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The former Australian heads of Citigroup Inc. and Deutsche Bank AG are among six bankers who will stand trial on cartel-activity charges over a share sale by an Australian bank in 2015.

The two Wall Street firms, along with Australia & New Zealand Banking Group Ltd. will also face trial over the alleged cartel behavior, which centers on a A$2.5 billion ($1.9 billion) stock sale by ANZ Bank, Australia’s competition regulator said in a statement Tuesday.

The bankers facing trial are:

  • Stephen Roberts, the former country head of Citi Australia
  • Itay Tuchman, who was head of Citi Australia’s global markets division
  • John McLean, a Citi executive
  • Michael Ormaechea, Deutsche Bank’s former Australia CEO
  • Michael Richardson, former head of equity capital markets at Deutsche’s Australia unit
  • ANZ Bank’s then group treasurer Rick Moscati

The case centers on ANZ Bank’s institutional placement of 80.8 million shares and how underwriters Citigroup and Deutsche Bank disposed of the roughly 25.5 million shares they were left holding after the sale. The third underwriter, JPMorgan Chase & Co., received immunity from prosecution in return for information.

ANZ Bank shares slumped 7.5% the day after the placement, at the time the biggest fall in almost seven years.

Deutsche Bank has pleaded not guilty and is “vigorously defending the charges,” the bank said in a statement Tuesday. “We believe the bank and its staff, including two former employees, acted responsibly, in the interests of clients and in a manner consistent with market-integrity rules,” it said.

A Citigroup spokeswoman referred to a statement when the charges were first laid in June 2018, saying the bank will “vigorously defend” the allegations on behalf of itself and its employees.

ANZ Bank declined to comment.

The trial will be heard in the Federal Court at a date to be set.

ANZ Bank and each of the executives charged are alleged to have been “knowingly concerned” in some or all of the alleged conduct, the competition regulator said. The three banks face maximum fines of A$10 million per offense. The bankers face prison terms of up to 10 years if convicted.

©2020 Bloomberg L.P.

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