Deutsche, Citi, and ANZ may have violated cartel laws in Australia

On Friday, in a local court a magistrate presiding over a case which is yet to go to trial, was presented with a four-word handwritten note by a JPMorgan Chase & Co banker which was presented by Australian prosecutors as a key document in its investigation which points to a cartel prosecution against Deutsche Bank AG and Citigroup Inc.

The note which stated “out of market today” was taken by JPMorgan compliance chief Oliver Bainbridge during a conference call with the other two banks. According to prosecutors, it shows that the three agreed to refrain from selling stock from a 2015 capital raising to boost its price.

“Mr Bainbridge has made contemporaneous notes with the words ‘out of market today’,” said Jennifer Giles, a local court magistrate presiding over the case. She went on to add, the prosecution has said the note “seems to have been corroborated by what happened in the market”.

Although the note contains just 4 words, its content could be used to support a federal case accusing the three banks of agreeing to withhold unsold stock from a A$2.5 billion capital raising for retail lender Australia and New Zealand Banking Group Ltd, in violation of cartel laws and misleading retail shareholders.

The case headed by the Australian Competition and Consumer Commission (ACCC), is being closely watched by investment bankers around the globe since it is likely to influence how they are allowed to conduct joint capital raisings.

Incidentally, several staff and ex-staff from JPMorgan, which includes Bainbridge, have agreed to act as prosecution witnesses in exchange for immunity.

Defence lawyers have been questioning JPMorgan witnesses as to how they came to cooperate with the authorities, how their signed statements were drafted and who was involved in drafting them. So far, all of the witnesses have said they did not take notes of the conference calls – which is at the heart of the case.

Bainbridge, who lives overseas, will probably be called to testify in February 2020, the court was told on Friday.

Although a year and 6 months have gone by since the charges were brought in, no trial date has been set; none of the accused, Deutsche, Citi, ANZ and several of their staff and ex-staff, have entered a formal plea. All have however said, they will fight the charges which carry prison terms.

Pre-trial hearings will resume in Sydney’s Downing Centre Local Court on January 30, 2020.



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