ACCC under fire for pre-populating JPMorgan witness statements in ANZ cartel case

The witness statements are from JPMorgan staff that have been granted immunity from the regulator’s case.

ACCC chair Rod Sims signed off on a request to JPMorgan as part of an immunity process in the cartel case. Picture: Zak Simmonds

The competition regulator has confronted fierce criticism for pre-populating parts of key JPMorgan witness statements with potential responses, that would help its landmark cartel case against three other banks.

ANZ’s senior counsel Simon Buchen told Penrith’s District Court on Friday the Australian Competition and Consumer Commission was tactically interviewing witnesses by making suggestions on statements about what they could say.

The witness statements were made by JPMorgan staff that were granted immunity from the regulator’s damning case. The ACCC sent shockwaves through the investment banking sector in 2018 when it and the Director of Public Prosecutions laid criminal charges against ANZ, Deutsche Bank and Citigroup and six senior executives.

The action related to how they managed the 2015 sale of surplus shares not taken up in a $2.5bn capital raising.

JPMorgan also worked on the raising but was not charged because of assistance it provided the ACCC.

Mr Buchen said in some cases when final witness statements were being compiled by the ACCC three potential options for answers were put to the person. That included to then JPMorgan Asia Pacific equities boss Mark Leung.

“This part of the statement deals with Mr Leung‘s state of mind, there is only one witness that can tell you about his state of mind,” Mr Buchen added.

“Before you had spoken to Mr Leung you, or one of your investigators, was pre-populating this draft statement with various possible concerns that he held after the relevant phone call... every single one of those states of mind just happens to assist the prosecution case.”

But the ACCC’s Leah Won, a former enforcement director now financial services competition manager, refuted those claims.

“These were propositions that were put to him, I’m not sure that is inconsistent with an open state of mind,” she said, noting she expected the pre-populated sections were likely “drawn from” the many documents and other material the ACCC held.

Mr Buchen said the answers were concocted by the ACCC to attempt to get the answers it wanted.

“Of course they are made up because this is …. Imagining what possible concerns Mr Leung had after a critical phone call, they have to be made up don’t they?”

Ms Won responded: “I don’t know that I agree with that.”

This week’s pre-trial hearings - which only allowed examination of ACCC witnesses - came to a close on Friday.

The parties told Magistrate Jennifer Giles, who was presiding over the hearings, they wanted the next court date set for August 25. The three banks and six individuals will all have separate meetings with the Director of Public Prosecutions to determine how their respective cases will proceed.

The six high-profile bankers charged over the cartel allegations were ANZ’s former treasurer now Australia chief risk officer Rick Moscati and former Deutsche Bank executives Michael Ormaechea and Michael Richardson. Citigroup’s former Australia chief executive Stephen Roberts and bankers John McLean and Itay Tuchman are also defendants in the case. Each banker, and their employer at the time, has denied the allegations.

The parties also heard in Friday’s hearings that ACCC chairman Rod Sims signed off on issuing a Section 155 notice, a statutory information gathering tool, to JPMorgan after he received his staff’s assessment of why it was required.

Mr Buchen took aim at why JPMorgan’s Mr Leung was not interviewed for two years after being granted conditional immunity. A week after the taking of his statement the ACCC lodged a court attendance notice.

Ms Won said part of the issue was that Mr Leung lived in Hong Kong.

Citigroup’s lawyers told the court JPMorgan’s lawyers at Gilbert + Tobin had raised the issue of the whether conference calls made during the capital raising would be admissible as evidence in the ACCC’s case.

Citigroup’s senior counsel Dean Jordan said Gilbert + Tobin’s competition expert Gina Cass-Gottlieb “gave input” on the admissibility of conference calls.

Ms Won countered that by asserting the ACCC sought further witness statements to strengthen its case and on the basis of its own legal advice, not relying on Ms Cass-Gottlieb’s opinion.

On Friday, questions were also raised by Mr Buchen about why a transcript of a compulsory interview the corporate regulator held with ANZ’s John Needham, a member of the bank’s treasury team, was included by the ACCC as evidence.

Ms Won said while consent hadn’t been granted at the time by the Australian Securities and Investments Commission, the ACCC was entitled to use the interview to enforce the Competition and Consumer Act.

Earlier this week, it was revealed JPMorgan and its lawyers told the competition regulator on several occasions including in 2015, they believed ANZ’s raising did not reflect cartel behaviour by the banks. The views were communicated at the same time JPMorgan was pressing for immunity if a legal case emerged.