ANZ cartel case: Concerns ACCC witness statements were ‘contaminated’

ACCC forced to address concerns key witness statements taken for the criminal cartel case against ANZ were ‘contaminated’.

There are concerns ACCC witness statements over the ANZ cartel case could be contaminated. Picture: AAP.

Senior investigators for the competition watchdog have been forced to address concerns about whether key witness statements taken for its landmark criminal cartel case against ANZ and major global investment banks were “contaminated” or were the “product of improper pressure” on immunity recipients, a court has heard.

Appearing before the Downing Centre Local Court in Sydney on Tuesday, Philip Strickland, SC, representing ANZ’s chief risk officer for the Australian division Rick Moscati, said there had been “significant developments” overnight as defence counsel had received “sizeable” witness statements from Australian Competition and Consumer Commission officers who are due to face cross examination this week.

“Those statements are significant and they have an impact on the witness who is currently before your honour,” Mr Strickland said.

READ MORE: Banker’s ‘dispute’ with ACCC | Lid lifted on “immunity deal” | Bankers to probe ACCC representatives |

He said they were important because they now raised for the first time the issue as to whether the process of gathering witness statements from a number of JPMorgan bankers, who have been given immunity in exchange for co-operating with the regulator’s investigation, was“contaminated” or “the product of improper pressure by ACCC case officers to fit some case theory”.

Mr Strickland said defence counsel would now likely make applications to expand the areas of cross examination, a move made to probe any potential miscarriage of justice in the building of the watchdog’s case against ANZ, Deutschebank and Citigroup.

Mr Strickland noted that Magistrate Jennifer Gileswas attempting to complete the cross examinations this week, but he argued that the matters raised in the ACCC witness statements was “central” to the lawsuit and not “peripheral,” and needed further examination.

It’s the latest spanner in the works for the ACCC’s explosive lawsuit against ANZ and the investment banks, after Jeff Herbert-Smith, a former JPMorgan banker on Friday claimed he “stood his ground” against the competition watchdog over a disagreement in the process of creating his statement. Mark Dewar, head of equity trading at JPMorgan, who has also been granted immunity, also told the court on Friday it was not his “idea” to include the contents of several paragraphs of his witness statement relating to the trading activities of JPMorgan and the activities of other banks.

Defence lawyers are using a series of case management hearings to probe the origins of information in the witness statements of JPMorgan bankers, which are being used to prosecute allegations Citigroup, Deutsche Bank and ANZ acted as a cartel when they were faced with a shortfall in demand for ANZ’s $2.5bn share placement to big fund managers in August 2015.

In an explosive suit launched mid-last year, the ACCC charged with cartel conduct six of the country’s most high-profile bankers: former Deutsche Bank head of capital markets Michael Richardson, ANZ’s chief risk officer for the Australian division Rick Moscati and former Deutsche Bank chief executive Michael Ormaechea, along with Citigroup’s head of capital markets, John McLean, Citigroup’s global head of foreign exchange trading, Itay Tuchman, and former Citigroup Australia chief executive Stephen Roberts. Each has denied the allegations.

While Citigroup, Deutsche and JPMorgan were acting as joint-lead managers on the raising, JPMorgan and a number of its bankers were granted immunity from legal action for its co-operation in the investigation.

The cartel allegations relate to how the banks then attempted to offload the unsold shares, worth about $800m, to investors.

Lawyers are gearing up to cross examine Marcus Bezzi, the ACCC’s executive general manager of specialised enforcement and advocacy, and three other regulators: head of financial services competition Leah Won, general manager of intelligence Jane Lin, and enforcement director Michael Taylor.

The case continues.