Get 40% Off
🚨 Markets Are Down. Unlock Undervalued StocksFind Stocks Now

Citi And Deutsche Bank's Australian Cartel Case Moves Ahead

Published 09/03/2019, 08:04 AM
Updated 07/09/2023, 06:31 AM

One of the Australia’s biggest white-collar crime prosecutions involving Australia and New Zealand Banking Group (OTC:ANZBY) and the local units of Citigroup (NYSE:C) and Deutsche Bank (NYSE:DB) finally showed progress. The news was reported by Reuters.

Lawyers and representatives of the banks met at the Sydney courtroom for a small administrative hearing ahead of legal argument scheduled to be held later this month.

Following this, the magistrate shifted hearings to a larger room as the court would need to make room for 20 barristers, an unusually large number in Australia, even for large cases. Also, the lawyers from both sides are required to submit briefs of evidence to each other a week before scheduled hearings on Sep 25 and Sep 27.

If found guilty, the banks could face penalties of A$10 million or triple the benefit of the conduct. The individuals charged could face 10 years in prison.

Brief on the Case

In August 2015, Citigroup, Deutsche Bank and JPMorgan (NYSE:JPM) were the underwriters for the institutional placement of nearly 80.8 million shares of ANZ Bank, which was conducted to raise capital for meeting regulatory requirements.

However, Citigroup and Deutsche Bank, as part of their underwriting commitment, created a cartel arrangement. They, thus, reached an understanding for the disposal of 25.5 million shares that the banks absorbed as part of the placement. These shares represented less than 1% of ANZ Bank’s outstanding shares at that time.

Having investigated the matter for over two years, the Australian Competition and Consumer Commission (“ACCC”) had put forth the allegations in June 2018.

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

The regulator laid criminal charges against Citigroup’s former Australia head Stephen Roberts, its present local head of capital markets John McLean and the bank’s London-based head of foreign exchange trading Itay Tuchman. Further, Deutsche Bank's former local chief Michael Ormaechea and former local capital markets head Michael Richardson were sued. Also, ANZ Bank’s treasurer Rick Moscati had been charged for cartel offences.

JPMorgan was found to be clean by the ACCC, and thus faced no charges.

Currently, Deutsche Bank, Citigroup and JPMorgan carry a Zacks Rank #3 (Hold) while ANZ has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Legalizing THIS Could Be Even Bigger than Marijuana

Americans spend an estimated $150 billion in this industry every year… more than twice as much as they spend on marijuana.

Now that 8 states have fully-legalized it (with several more states following close behind), Zacks has identified 5 stocks that could soar in response to the powerful demand. One industry insider described the future as “mind-blowing” – and early investors can still get in ahead of the surge.

See these 5 “sin stocks” now >>

JPMorgan Chase & Co. (JPM): Free Stock Analysis Report

Citigroup Inc. (C): Free Stock Analysis Report

Deutsche Bank Aktiengesellschaft (DB): Free Stock Analysis Report

Australia & New Zealand Banking Group Ltd. (ANZBY): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.