ACCC’s Rod Sims walks on the wild side with ANZ cartel charges

Rod Sims is walking on the wild side by lobbing criminal charges at the leaders of the local banking industry.

ACCC chairman Rod Sims. Picture: James Croucher

The ACCC has raised the stakes big time in its astonishing assault on the investment banking industry, taking criminal action against the former local chiefs of global behemoths Citibank and Deutsche Bank, along with ANZ Treasurer Rick Moscati.

ACCC chief Rod Sims risks regulatory overreach in his step from this year’s cartel action against Mildura based Country Care and Zimmer frames, to the former chiefs of two Australian arms of global investment banks, in showcasing his new criminal powers.

It’s a fine line between strong enforcement and overreach, which damages the regulator’s credibility — but if anyone was in any doubt about Sims’ wish to send a message to corporate Australia on cartels he has dismissed them.

The facts the ACCC will allege are clear but the complexity is how the law applies and it will also note that the decision on criminal or civil is for the DPP to make.

The colourful language in the video conference from JP Morgan (which was granted immunity) would seem to be exhibit A.

When the full facts are tested, informed judgments can be made. But right now Sims is taking a walk on the wild side in his attempt to show business what to expect.

A decade ago ASIC failed dismally in a similar overreach when the Federal Court threw out its insider trading case against Citibank and Sims will be hoping his case doesn’t face a similar end

Citi’s Stephen Roberts has been named in an explosive criminal case alleging cartel conduct in Australia’s financial markets. Picture: John Feder

If the firms are guilty of cartel behaviour their bosses should be held responsible. But this is a technical action against investment banks who, by nature, are motivated by self-interest over just about everything else — which is a big step away from cartel behaviour in a joint underwriting.

Stephen Roberts and Michael Ormaechea are the former heads of Citi and Deutsche and their then market chiefs Itay Tuchman and Michael Richardson are also in the firing line.

To charge an individual the ACCC must prove personal knowledge and involvement in the decision, which presumably is what it will try to do.

These are high profile, widely respected bankers and when the DPP charges were unveiled today Sims did what few others have achieved in uniting the investment banking industry against him, accusing him of jumping on the bank bashing bandwagon.

Sims is a highly political and intellectually honest regulator and the DPP is not known for such games. So they are big charges which will take a couple of years to settle, long after Sims has retired to Italy for a longer spell than he will take later this month.