Getting a fair r
Commerce Commission chair Mark Berry talks cartels, whistleblowers and consumer compensation with Tim Hunter.
FOR A man whose job involves grappling with the forces of corporate darkness, Mark Berry is disarmingly twinkly.
Dapper in legal pinstripes and cufflinks, he seats himself at the head of the Commerce Commission’s Auckland boardrooom table and tiptoes through a conversation about secret cartels, dawn raids, and multimillion dollar settlements.
‘‘It’s fair to say it’s one of the sexy areas of commercial legal practice,’’ he says, delivering the line deadpan, with only a small wrinkle around the eyes.
Berry, chairman of the commission since April 2009, gives every appearance of enjoying the hefty weight of its work.
This is just as well. On the commission’s books at the moment are cases involving an alleged cartel in foreign exchange trading, alleged mis-selling of interest rate swaps, the price of broadband internet, supermarket supply deals and the purchase of Carter Holt Harvey’s pulp and paper business by Japanese interests.
The forex investigation was the result of a whistleblower dobbing in alleged co-conspirators.
Under a policy known as ‘‘leniency’’, the commission can grant immunity from prosecution in exchange for evidence of an illegal cartel. In April, the commission said it was probing possible manipulation of currency rates and influencing of benchmarks after someone had applied for leniency.
Beyond that it has said nothing. Berry remains discreet.
‘‘All I can say at this stage is it’s one of the publicly known cartel cases we are doing at the moment,’’ he says. ‘‘We’re having to go through the factual matrix and work out what kind of harm it’s having in the New Zealand marketplace. That’s pretty upfront in our investigation basket.’’
The commission’s forex probe follows similar action by more than a dozen regulatory authorities around the world, including in Britain, the United States, Switzerland, Hong Kong and Australia, as well as civil legal action.
Banks named as defendants in a class action lawsuit filed in New York in March are Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, RBS, and UBS.
The allegations, which are denied, say the banks manipulated exchange rates used in an important benchmark known as the London close.
‘‘By communicating directly with one another, including in closed network chat rooms with incriminating names such as ‘The Cartel’, ‘The Bandits’ Club’, and ‘The Mafia’, defendants exchanged confidential customer order information and trading positions,’’ says the complaint.
Last week Britain’s Serious Fraud Office opened a criminal investigation into allegations of fraudulent conduct in the forex market, adding to a reported criminal probe by the US Department of Justice and the Federal Bureau of Investigation begun last year.
Berry is saying little about the New Zealand issues, save that they are linked to the global probe.
‘‘I think you’ll find the cartel conduct is of a uniform international kind. It’s a question of just working out whether any parties in New Zealand are in the frame of that cartel and, if so, what commercial harm has arisen out of that.’’
The identity of the Kiwi squealer remains secret, but will inevitably become clear if the commission takes legal action.
‘It is better that it’s not widely known in the marketplace prior to us getting to interview people . . . You don’t want documents disappearing.’
‘‘When we got these international cartel cases first of all the person who’s got immunity is required to produce a great deal of evidence and to make themselves available,’’ says Berry. Failure to come up with the goods can mean the immunity is withdrawn.
The commission is in close contact with overseas regulators, ‘‘but the evidence we are using is driven off information provided by the immunity applicant for the most part’’.
Once it has its claws in a case, the commission has extensive power to demand interviews with people and to search premises, although Berry won’t be drawn on progress so far.
‘‘We’re still largely information gathering,’’ he says, and it’s hard to tell how long the investigation will take.
But what about those words – ‘‘one of the publicly known cartel cases’’. So there are more not publicly known?
Yes, says Berry. Most of the six or seven current cartel investigations are under wraps.
‘‘In terms of investigation techniques it is better that it’s not widely known in the marketplace prior to us getting to interview people or put information requests. You don’t want documents disappearing.’’
Asked if his office has the powers to do its job, he says: ‘‘Yup, we do.
‘‘One thing we recently have got