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Business trends

Australia brings down hammer on more wayward banks

ANZ hit with cartel charges; CBA agrees to record settlement

An ANZ bank branch in Sydney. The banking group, along with Citigroup and Deutsche Bank, was hit with cartel charges.   © Reuters

SYDNEY -- Australia's financial watchdogs widened their crackdown Tuesday on major financial groups in their quest to clean up a sector plagued by misconduct.

In the latest case, an agency lodged cartel charges against Australia and New Zealand Banking Group, Deutsche Bank and Citigroup, along with executives at all three of them. The Australian Competition and Consumer Commission says that the charges relate to ANZ's 2.5 billion Australian dollar ($1.9 billion) fundraising round in 2015.

The Australian bank, acting with underwriters Citigroup and Deutsche Bank, is accused of improperly offloading 25 million shares, worth A$789 million, that went unsold in the stock placement. If found guilty, an individual could face a maximum prison sentence of 10 years, and a corporate entity could pay a substantial fine. ANZ denies committing any illegal acts.

Tuesday's action follows Monday's announcement of the record A$700 million settlement reached between Commonwealth Bank of Australia and the Australian Transaction Reports and Analysis Centre, another government financial watchdog. CBA has admitted that it failed to report on time more than 50,000 transactions exceeding A$10,000, in violation of anti-money-laundering laws.

The bank has also acknowledged that it was lax in its oversight functions from 2012 to 2015. Some of the transactions are suspected of being connected to crime syndicates.

"Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward," CBA CEO Matt Comyn said Monday in a statement.

The crackdown on bankers show no sign of letting up, with the ACCC stating that investigations of cartel cases will continue.

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