Senior bankers charged in an extraordinary cartel conduct case brought by Australian regulators are unlikely to face hefty jail terms, a banking expert says.
Criminal charges were laid against ANZ Bank, Deutsche Bank and Citigroup Global Markets Australia, as well as executives from each institution on Tuesday over the handling of a $2.5 billion share sale by ANZ.
ANZ group treasurer Rick Moscati and the former head of Citigroup's Australian operation are among the executives facing charges that carry jail terms of up to 10 years over the 2015 capital raising that drew the attention of the Australian Competition and Consumer Commission.
However University of Sydney banking expert Andrew Grant says it is unlikely the charges will result in such heavy sentences, and the case itself may not progress far through the courts.
"I can see it going to court, but only as a test case," Dr Grant told AAP on Wednesday.
"Maybe ANZ would like to settle out of court even if they don't feel like they've done anything wrong, if only to get it out of the press."
ACCC chairman Rod Sims said the cartel conduct charges relate to trading in ANZ shares by Deutsche Bank and Citigroup, while ANZ and the executives charged are alleged to have been knowingly concerned in some or all of the alleged conduct.
The raising in question relates to ANZ moving in 2015 to increase the amount of money it holds in reserve to cover loan exposures, in line with new regulatory requirements.
The bank did this via a $2.5 billion placement of shares underwritten by Deutsche and Citigroup.
The underwriters ended up with 25.5 million shares after a shortfall in the placement of almost 81 million shares and regulators are examining whether the market should have been informed about how the shortfall was to be handled.
Dr Grant, from the University of Sydney's Business School, said laws around the handling of capital raisings and the disposal of shares acquired by underwriters were unclear and "might need a little more clarification on the law".
One question is whether discussions between vendors and underwriters in capital raisings should be considered cartel conduct.
"It hasn't been traditionally the ACCC's role to assess financial markets, and the type of behaviour they are observing in financial markets, if it had occurred in other environments, might have been considered to have been a cartel," Dr Grant said.
"But in financial markets it's 'how else are we going to raise $2.5 billion in equity if we don't all work together?'"
Dr Grant said he would be "surprised" if the six bankers named in the charges ended up with 10-year jail terms.
"The argument will be the law is not clear on this ... so it's not really clear we were intentionally misleading the public on this," he said.
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