Courtesy of Pam Martens
Australia is showing its muscle in an area where the U.S. has tip-toed around for almost two decades. We’re talking about Wall Street’s brazen antitrust activity in securities offerings.
Last month the Australian Competition and Consumer Commission (ACCC) announced that “criminal cartel offences” had been brought against Citigroup Global Markets Australia and Deutsche Bank over a share offering for Australia and New Zealand Banking Group (ANZ) that had been conducted in 2015. ANZ was also criminally charged in the matter as were three executives of Citigroup Australia, two executives at Deutsche Bank and one at ANZ.
Although JPMorgan had been part of that underwriting syndicate, it wasn’t charged. The Financial Times reported at the time that “JPMorgan, which jointly underwrote the share placement with Citi and Deutsche, has not been charged by prosecutors and has reportedly been granted immunity after self-reporting issues to regulators.”
The ACCC provided sparse details on exactly what the underwriting cartel was alleged to have done, saying it was now a matter for the court to decide. Business media, however, suggested the criminal charges arose out of a concerted effort by the underwriting banks to conceal the fact that the 2015 share offering for ANZ was not fully subscribed, that the banks were stuck with a big chunk of the offering and that they then conspired on how they would dispose of the shares.
Being criminally charged with cartel activity is nothing new to Citigroup – or JPMorgan. Both pleaded guilty to participating in the rigging of foreign currency exchange markets on May 20, 2015. This is a small peek into what the U.S. Justice Department charged JPMorgan with in the matter:
“In furtherance of the conspiracy, the defendant and its co-conspirators engaged in communications, including near daily conversations, some of which were in code, in an exclusive electronic chat room which chat room participants, as well as others in the FX Spot Market, referred to as ‘The Cartel’ or ‘The Mafia.’ Participation in this electronic chat room was limited to specific EUR/USD traders, each of whom was employed, at certain times, by a co-conspirator dealer in the FX Spot Market. The defendant participated in this electronic chat room through one of its EUR/USD traders from July 2010 until January 2013.”
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