By Byron Kaye and Scott Murdoch

SYDNEY (Reuters) -Australia on Friday withdrew a cartel lawsuit against Citigroup Inc, Deutsche Bank AG and several former executives over a $1.8 billion share issue, a stunning retreat from what would have been the country’s biggest white-collar criminal trial.

After nearly four years of pre-trial hearings in packed courtrooms, federal prosecutors said they had pulled the case after reviewing the evidence and concluding “there were no longer reasonable prospects of conviction”.

Prosecutors had narrowed the scope of the lawsuit in recent months. Charges against the former head of Citi in Australia and against the client for the stock issue in question, Australia and New Zealand Banking Group Ltd, plus ANZ’s former treasurer, had already been dropped.

The move brings to an end a potentially far-reaching challenge to the way investment banks conduct capital raisings as joint lead managers and removes the threat of jail time for the former senior staff of some of the world’s biggest investment banks.

At the heart of the case were conference calls soon after the 2015 stock issue in which the banks discussed that they were left holding unissued shares. Their staff were heard on the call saying they would withhold selling the shares to prevent a flood of new stock hitting the market, sending the price down.

“We have always maintained that our bank and our staff … acted responsibly, in the interests of clients and in a manner consistent with all rules and regulations,” Deutsche Bank said in a statement. “We recognise the significant impact that this case has had on the lives of the individuals involved but we are pleased to see that they have been vindicated.”

Michael Richardson, Deutsche’s Australian head of equity capital markets from 2008 to 2017 and one of the individual defendants in the case, said he welcomed the decision but added: “I will never get back the last four years of my life.”

“It has had an enormous impact on me, my business career and my family and I struggle to understand why I have been put through this ordeal,” he said in a statement. “I am looking forward to throwing myself fully back into my business career without the distraction and disruption of this matter.”

Citi said it had “steadfastly denied the allegations and is looking forward to putting this matter behind us”.

ANZ was not immediately available for comment. When it was removed from the case in October, it said it had always acted lawfully.

A third investment bank working on the stock issue, JPMorgan Chase & Co, was also on the conference calls. On legal advice, it notified regulators about a potential perception of collusion in exchange for immunity from prosecution, its former staff said in hearings, adding that they never viewed the discussions as improper.

Representatives for JPMorgan were not immediately available for comment.

The Australian Competition and Consumer Commission, the antitrust regulator which first referred the matter to prosecutors, said it respected the decision and “with them will consider what lessons can be learnt from this matter”.

(Reporting by Byron Kaye and Scott Murdoch in Sydney with additional reporting by Harish Sridharan in Bengaluru; Editing by Gerry Doyle and Edwina Gibbs)