SYDNEY (Reuters) – An Australian investigator who helped bring criminal cartel charges against Citigroup Inc (C.N) and Deutsche Bank AG (DBKGn.DE) said he first heard concerns about a stock issue they worked on from a rival regulator, but the agencies acted independently.
The disclosure on Tuesday in a pre-trial court hearing relates to a central part of the defense against the country’s biggest white collar criminal case: the investment banks want to show the evidence used to charge them was tainted by outside influences and departure from due process.
The banks, their client Australia and New Zealand Banking Group (ANZ.AX) and several current and former executives are charged with colluding during a 2015 stock issue for ANZ to withold unsold shares and keep the stock from falling. A third investment bank which worked on the share sale, JPMorgan Chase & Co (JPM.N), cooperated with authorities in exchange for immunity.
In a second day of testimony, Australian Competition and Consumer Commission (ACCC) enforcement director Michael Taylor said corporate regulator the Australian Securities and Investments Commission (ASIC) was first to tell him about concerns to do with the capital raising.
“The investment banks may not have been entirely truthful with ANZ bank, I recall that coming up,” Taylor told a packed Sydney courtroom, referring to conversations with ASIC.
“I became aware that there was some suggestion that bids for shares had been placed by the investment banks to fill the book,” Taylor added.
The ASIC investigation focused on suspected insider trading and suspected failure to fulfill obligations for the investment banks to act in clients’ best interests, while ACCC pursued inquiries into suspected antitrust breaches, and the two were “quite separate”, he said.