The Commonwealth Director of Public Prosecutions has dismissed a four-year-old criminal cartel case against Deutsche Bank, Citi, and several former executives, dealing a stunning blow to the case's instigator, ACCC chairman Rod Sims.
The case involved a A$2.5 billion ($1.8 billion) share offering, effectively ending what would have been Australia's largest white-collar criminal trial.
The CDPP informed the accused on Friday morning, including Citi's Itay Tuchman and John McLean, as well as Deutsche Bank's Michael Richardson and Michael Ormaechea, that all charges had been withdrawn and no further court action would be carried out..
The federal court judge Michael Wigney's associate was notified of the case's dismissal via email from the CDPP, which was also sent to 29 other individuals.
Wigney testified in federal court that he was taken aback by the CDPP's decision to file a "nolle prosequi" (refusing to pursue) against all parties.
In a brief hearing lasting only a few minutes, Tony Bannon SC, the attorney representing Michael Ormaechea, delivered a brief statement criticizing the public prosecutor's handling of the case, which has been beset by setbacks and delays.
The parties faced criminal prosecution, substantial fines, and possible prison terms in connection with the alleged activity, which occurred in August 2015 during a series of phone conversations aimed at maintaining a floor under ANZ's share price following the company's failed $2.3 billion capital raising.
The bank cartel case has been gradually unraveling over the last year, with charges against former Citi Australia chairman Stephen Roberts being dropped in August and ANZ Banking Group and former Treasurer Rick Moscati being dropped in October.
Charges against ANZ Banking Group and Moscati were dropped shortly after Michael McHugh SC assumed control of the CDPP case in federal court.
"We respect the CDPP's independent decision and will discuss any lessons learned from this matter with them," Sims said in a statement, referring to the CDPP, who did not respond to a request for comment.
This is a stunning retreat from a lawsuit that could have resulted in the imprisonment of former executives of some of the world's largest investment banks.
Additionally, it puts an end to a challenge to the way investment banks conduct capital infusions as joint lead managers.
Citigroup Global Markets Australia and Deutsche Bank will also be cleared of charges.
