Former Australian heads of Deutsche Bank, Citi, charged with cartel conduct

Former country bosses of banking giants Citigroup and Deutsche Bank are among six senior bank executives who have been charged with criminal cartel conduct, following an investigation by the competition watchdog.

The Australian Competition and Consumer Commission (ACCC) on Tuesday published the names of executives who had been charged, alongside their employers, over a 2015 share issue by ANZ Bank in which it raised $2.5 billion from big investors.

Under criminal cartel laws, individuals can face up to 10 years' jail or fines up to $420,000 if they are found guilty, while companies could face maximum penalties of 10 per cent of annual turnover, or three times the benefit gained from the behaviour.

A criminal charge had been laid against Citi's former country head for Australia, Stephen Roberts, the watchdog said. Mr Roberts spent more than a decade running Citi's Australian arm, before announcing his retirement in March 2015, and leaving the bank in July the following year.

Australian Competition and Consumer Commission chair Rod Sims said the charges were "serious."Credit: Alex Ellinghausen

John McLean, Citi Australia's head of capital markets origination, and Itay Tuchman, who was head of markets at the time, were also charged. Mr McLean still works at Citi, and Mr Tuchman now works for Citi in the United Kingdom.

From Deutsche Bank, criminal charges were laid against former country head Michael Ormaechea, and former head of equity capital markets for Australia and New Zealand,  Michael Richardson.  Mr Ormaechea and  Richardson both left the bank last year.

At the time of the 2015 ANZ capital raising, Mr Ormaechea was co-head of investment banking for Asia-Pacific, and when he left in the middle of last year he was chief executive for Australia.

The ACCC also confirmed charges had been laid against ANZ Bank Treasurer Rick Moscati, as the bank had flagged last week.

The banks have vowed to defend the charges against them and those against their staff.

The allegations against the banks relate to the role played by investment banks as lead managers or "underwriters" - where a bank guarantees some proportion of shares being issued to investors will be bought at a certain price.

Former CEO of Citi Stephen RobertsCredit: Tamara Voninski

The banks stand accused of reaching an "understanding" over how they would offload ANZ shares after they ended up buying hundreds of millions in ANZ stock as underwriters.

JPMorgan, the other underwriter on the deal, is believed to have been given immunity by the ACCCC, and has not commented on the case.

ACCC chair Rod Sims said the charges were "serious," and were the result of an investigation of more than two years.

"Charges have now been laid by the Commonwealth Director of Public Prosecutions and the matter will be determined by the court,” Mr Sims said.

Deutsche Bank said it would "vigorously" defend the charges and it believed the bank, Mr Ormaechea and Mr Richardson acted responsibly, in the interests of clients, and consistently with the Corporations Act in the 2015 raising.

"Both Michael Ormaechea and Michael Richardson are highly regarded and have our full support," the bank said.

Citi last Friday said it would "vigorously defend" the claims against it and employees. It said "this is a highly technical area".

ANZ Bank chief risk officer Kevin Corbally also said on Friday the bank believed it had acted in accordance with the law, and it would defend the company and Mr Moscati.