ACCC’s internal evidence gathering processes in ANZ cartel case ‘inadequate for the task’: Maddocks partner Shaun Temby
Competition regulator’s handling of ANZ criminal cartel case, which collapsed last month, was ‘inadequate’ and a ‘serious disappointment’, according to Maddocks.
Australian law firm Maddocks has criticised the competition watchdog’s handling of the ANZ criminal cartel case in a recent report, saying its evidence gathering was “inadequate”.
Maddocks’ report into the Australian Competition and Consumer Commission’s performance last year comes after the federal prosecutor dropped its major criminal cartel case on February 11, following a last-minute review of its evidence.
The ACCC had pursued an investigation against the banks and six executives over allegations that they had manipulated the price of ANZ shares following a $2.5bn placement in 2015.
The Commonwealth Director Public Prosecutions last month dropped its charges against all accused in the case – which had been in the courts since 2018 – minutes before a three day hearing before Federal Court judge Michael Wigney was set to commence.
The charges related to an August 2015 share placement by ANZ and discussions among the banks that had underwritten the fundraising. Those conversations included details about future plans to sell stock that remained on their books, which the ACCC alleged constituted cartel behaviour.
Deutsche bank executives Michael Ormaechea and Michael Richardson and two Citi bankers Itay Tuchman and John McLean faced up to 10 years in jail if they had been found guilty.
Maddocks partner Shaun Temby said the ACCC had scored “significant victories” in regulating digital platforms and raising penalties for consumer law breaches but the watchdog’s role in the ANZ prosecution’s collapse could not go unnoticed.
The ACCC had “no clear process” for gathering evidence in the case, which is critical for criminal investigations, Mr Temby told The Australian on Wednesday.
“The problems experienced by the ACCC – together with the CDPP – in clearly defining the allegations against the defendants in the indictment are a significant disappointment,” he said.
“Despite having over 10 years since the criminal cartel laws were first introduced, the ACCC’s internal evidence gathering processes were inadequate for the task.”
The ACCC’s immunity policy “came under criticism” after it struck a deal with JP Morgan, another bank in the placement syndicate, guaranteeing them immunity in exchange for co-operation, Mr Temby said.
A key issue when investigating the cartel case was that the ACCC allowed JP Morgan’s lawyers to be present when employees were interviewed about the 2015 placement, he said.
Mr Temby also questioned the committal hearing process, where senior executives were questioned in the NSW Local Court in 2018 to decide if there was enough evidence for the matter to go to trial in the Federal Court.
Maddocks’ report found there were “significant delays” at the initial committal stage, which lasted 30 months.
“Serious questions should also be asked about whether the committal hearing process works effectively or is simply an unnecessary and wasteful duplication of resources,” said Mr Temby.
“It is perhaps no coincidence that this troubled proceeding has been brought to an end before the departure of Mr Sims from the ACCC and the arrival of his successor, Gina Cass-Gottlieb.”
The ACCC declined to comment on Wednesday.
The federal prosecutor was sent back to the drawing board three times to change their indictment, which Federal Court Justice Michael Wigney called a “complete shemozzle”.
In the final change to the indictment, which dropped all charges against ANZ and senior executive Rick Moscati, Justice Wigney said the change was “at best obscure and at worst borderline incomprehensible”.
Justice Wigney also criticised the complexity of criminal cartel laws, saying whoever drafted them could not “possibly have ever set foot in a criminal trial court before”.
ACCC Chairman Rod Sims said in February he respected the CDPP’s decision to drop the charges against Deutsche Bank, Citi and the senior banking executives and would consider what “lessons could be learned” from the case.
“We considered that the alleged conduct stood to damage competition and the Australian economy,” Mr Sims said. “That is why the ACCC investigated this conduct and referred the evidence to the CDPP. The Office of the CDPP assessed the evidence very carefully and, as required by law, made an independent decision to prosecute.”
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