Australia investigator met other regulators before Citi, Deutsche charges

An Australian investigator who helped bring criminal cartel charges against Citigroup Inc and Deutsche Bank AG told a court he met agents from another regulator in a cafe to discuss the matter but the talks were "high level" only. 

Citi, Deutsche, their client Australia and New Zealand Banking Group Ltd and several of their current and former executives are accused of forming an agreement during an A$2.5 billion ($1.7 billion) ANZ stock issue to withhold selling unwanted shares to prevent them from falling when they hit the market in 2015.

In pre-trial hearings, lawyers for the banks and their staff have suggested witnesses for the Australian Competition and Consumer Commission (ACCC), which brought the charges in Australia's biggest white collar criminal case, relied on evidence that was tainted by outside influences and pressure from above.

ACCC enforcement director Michael Taylor was asked on Friday about a meeting with two investigators from another regulator, corporate watchdog the Australian Securities and Investments Commission (ASIC) in a Sydney cafe in early 2016, more than two years before charges were laid.

"They would have told me they where they were at," Taylor told the packed Sydney court room, referring to the cafe meeting.

"They might have said, 'we have' or 'we are about to issue notice," he added, referring to notices which ASIC issued to the banks telling them they were under investigation.

Taylor denied "careful coordination" with ASIC, and said his meetings with its investigators were "very short" and "at a very high level". ASIC did not specify who they had issued notices on, other than the corporate entities, he added.

Asked if he had requested ASIC get him recordings of two August 2015 conference calls between the bankers in which they allegedly discussed the share sale, evidence at the heart of the case, Taylor said, "it could have been discussed".

"I just heard that they had done this. I didn't ask them to do it," he told the court.

Asked why he had not kept an email or other record of the cafe meeting, Taylor said the ACCC "team knew I was meeting with them. There were lots of things that weren't necessary to put in an email."

The case is being closely watched by investment bankers around the world because it could have implications on the way they are allowed to run share sales. If found guilty, the banks face hefty fines while the individuals face prison time.

A year and a half since the charges were brought, the matter is still at a pre-trial stage and none of the accused has entered a formal plea, although all have said they will plead not guilty.

The hearings continue.