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Australian Prosecutors Seize Four Word Note by JP Morgan Banker in Deutsche, Citi Case

Australian prosecutors have taken a four-word handwritten note by a JPMorgan banker as fundamental to a criminal cartel prosecution against Citigroup and Deutsche Bank, a court heard Friday.

The note, which read “out of the market today,” was seized by JPMorgan compliance head Bainbridge at the time of a conference call with the other two banks, and prosecutors say it reveals the three agreed to refrain from selling stock from a 2015 capital elevating to boost its value, the court heard.

Although brief, the note’s existence could also be used to support a federal case accusing the three banks of agreeing to withhold unsold stock from an A$2.5 billion capital raising for New Zealand and Australia Banking Group Ltd, misleading retail shareholders and violating cartel laws.

The case, brought by antitrust regulator the Australian Competition and Consumer Commission (ACCC), is being closely followed by investment bankers worldwide because it might influence how they’re allowed to perform joint capital raisings.

JPMorgan and several of its workers and ex-staff, along with Bainbridge, have agreed to act as prosecution witnesses in exchange for protection, the court had previously heard.

Defense lawyers have been questioning the JPMorgan witnesses about how they came to help the authorities, how their signed statements were written, and who was involved. To date, all of the witnesses stated they didn’t take notes of the conference calls at the core of the case.

A day prior, another JPMorgan witness who was on the calls, the bank’s regional markets chief Jeff Herbert-Smith, told the court the banks had not colluded on the capital raising, and that he was surprised when the ACCC asked him.

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