A senior officer from the ACCC has rejected claims that the regulator took legal advice from immunity applicant JPMorgan before launching its high profile criminal cartel case against ANZ, Citigroup and Deutsche Bank.
In the final day of a committal hearing before Magistrate Jennifer Giles on Friday, Citi’s barrister Dean Jordan SC questioned the Australian Competition and Consumer Commission’s last witness as to how the regulator initially briefed the Commonwealth Director of Public Prosecutions about the case in July 2017.
ACCC general manager of financial services, competition branch, Leah Won, was asked about a meeting she attended with JPMorgan’s lawyers in June 2017. Raised during the meeting were issues about the admissibility of telephone recordings of conversations that occurred when the alleged cartel agreement was made two years earlier.
Won was also grilled on a statement that had been “pre-populated” with anticipated cartel concerns of a key JPMorgan witness might, and was drafted before the regulator had spoken to the witness to take his statement.
ANZ, Deutsche Bank, Citi and six high-ranking bank executives were charged by the CDPP in June 2018 over an alleged cartel agreement reached after a $2.5 billion institutional share placement by ANZ in August 2015. As underwriters, JPMorgan, Deutsche and Citi are said to have agreed to take up a $791 million shortfall in the sale of the shares to maintain ANZ’s share price.
‘The broader proposition is they were not our lawyers’
Under cross-examination by Jordan, Won denied that lawyers from JPMorgan were ever given the chance to provide advice on preparation of the ACCC’s July 2017 prosecution brief or the admissibility of any included evidence.
Won’s facial expressions during this questioning prompted Jordan to interrogate further.
“For the record, when you responded to those questions, you looked very perplexed. Is that fair?” Jordan asked.
“They seemed unusual questions,” Won replied.
“Why?” Jordan asked.
“I can’t imagine receiving advice from lawyers that were not retained by us,” Won explained.
“Particularly lawyers who are acting for an immunity applicant in an ongoing cartel investigation,” Jordan suggested.
“Yes, but I think the broader proposition is they were not our lawyers,” Won continued.
Giving advice or merely expressing a view
Jordan took Won to a file note of the June 2017 meeting between herself, other ACCC officers, and JPMorgan’s lawyers from Gilbert + Tobin, including partner Gina Cass-Gottlieb.
The file note included a single bullet point saying that Cass-Gottlieb had raised the issue of whether the audio recordings were admissible.
Won said it seemed Cass-Gottlieb had “expressed a view” on admissibility and had not given advice.
After the meeting, the ACCC obtained a number of supplementary witness statements specifically discussing the issue of the admissibility of the evidence, which ultimately “strengthened the prosecution’s case”, Jordan said.
“Is it your evidence that the subsequent preparation by the ACCC of a number of supplementary statements going directly to the issue of the admissibility of the telephone calls has nothing whatsoever to do with the fact that Ms Cass-Gottlieb raised that issue back in June 2017. Is that your evidence?” the barrister asked.
Made up or pre-populated witness concerns
Won also faced cross-examination by ANZ barrister Simon Buchen SC about a so-called shell statement created before a May 2018 interview with Mark Leung, who had just stepped into the role of JPMorgan China CEO.
Leung’s final witness statement made mention of a number of phone calls that occurred in August 2015 when he was co-head of global equity for the bank. In particular, Leung gave evidence that the underwriters had agreed to the same trading strategies for the remaining shares, and that he thought ANZ’s involvement in discussing these strategies was inappropriate.
In the shell statement, ACCC officers had written multiple choice options regarding “concerns” and “anticipated states of mind” that Leung may have had regarding the August 2015 telephone calls, the court heard.
Some of these multiple choice options made it verbatim into Leung’s final witness statement.
Won resisted a suggestion by Buchen that the remarks included in the shell statement were “inappropriate” when the interview with Leung had not taken place. She told the court that they may not have been “made up” and could have been drawn from prior transcripts or recordings that Leung had participated in.
“Of course they’re made up because this is an investigator imagining what possible concerns Mr Leung had after a critical phone call. They have to be made up, don’t they?” Buchen asked.
“I don’t know that I agree with that,” Won replied.
“Ms Won, the very fact that there are three different options … means that your investigator was speculating about various possible culpable concerns that he would have held at the time,” Buchen shot back.
‘I’m collecting a witness’ evidence, not my own’
“I’m collecting a witness’ evidence, not my own,” Won said.
“You’re not there to put words into a witness’ mouth,” Buchen asked.
“Absolutely,” Won replied.
“Do you know whether that document was in fact used in taking the witness statement of Mr Leung?” Single asked.
“I have no idea,” Won replied.
The individual defendants in the criminal action are former ANZ treasurer Rick Moscati, Deutsche Bank’s former CEO Michael Ormaechea, Deutsche Bank’s former head of equity capital markets Michael Richardson, Citigroup’s former CEO Stephen Roberts, Citigroup’s managing director John McLean and Citigroup’s global head of foreign exchange Itay Tuchman.
The case is the first major criminal cartel prosecution against companies in the finance sector. Under competition law, the banks face fines of up to $10 million per offence. Any executives found guilty could face up to 10 years in jail and/or fines of up to $420,000 per offence.
All three named banks and the six named executives, were “knowingly concerned in some or all of the alleged conduct,” the ACCC said in a statement issued in June 2018.
The CDPP is represented by Jennifer Single SC with Bharan Narula. ANZ is represented by Tim Game SC and Simon Buchen SC, instructed by Allens. Citigroup is represented by Dean Jordan SC and Rob Ranken, instructed by Herbert Smith Freehills. Deutsche Bank is represented by Murugan Thangaraj SC and Emma Sullivan, instructed by King & Wood Mallesons. Moscati is represented by Philip Strickland SC, instructed by Grindal Legal and Patrick & Associates. McLean is represented by Kate Morgan SC, instructed by Watson Mangioni. Roberts is represented by Robert Dick SC and Robert Pietriche, instructed by Horton Rhodes. Ormachea is represented by Hament Dhanji SC, instructed by Arnold Bloch Liebler. Richardson is represented by Sam Pararajasingham, instructed by Arnold Bloch Liebler. Tuchman is represented by Neil Clelland QC and Garry Livermore SC, instructed by MinterEllison. JPMorgan was represented by Nicholas Owens SC, instructed by Gilbert+ Tobin.
The case is R v Australia and New Zealand Banking Group Limited.