Commonwealth Bank Sued for Alleged Rate Rigging by Regulator
Commonwealth Bank Sued for Alleged Rate Rigging by Regulator
(Bloomberg) -- Commonwealth Bank of Australia is being sued by the nation’s securities regulator for allegedly rigging the benchmark bank-bill swap rate, adding to legal problems for the nation’s largest lender.
The Australian Securities & Investments Commission said it began legal proceedings Tuesday in the Federal Court in Melbourne, alleging the bank engaged in “unconscionable conduct and market manipulation” between January and October 2012.
Commonwealth Bank is the last of the nation’s big-four lenders to face claims it manipulated the benchmark, the local equivalent of Libor. Australia & New Zealand Banking Group Ltd. and National Australia Bank Ltd. in November agreed to pay A$50 million ($40 million) each to settle. Westpac Banking Corp. is contesting similar allegations.
The suit adds to a list of problems facing incoming Chief Executive Officer Matt Comyn, who was yesterday named to replace Ian Narev. Commonwealth Bank is also fighting allegations it systemically breached anti-money laundering laws, which have spawned a class-action lawsuit and a separate ASIC probe. The nation’s biggest banks also face a wide-ranging inquiry starting next month into their treatment of customers.
Commonwealth Bank disputed the allegations, it said in its response to the ASIC lawsuit.
In its rate-rigging claim, ASIC alleges Commonwealth Bank had a large number of products priced or valued off the swap rate, and on three occasions traded with the intention of affecting the level at which the rate was set to maximize its profit or minimize its losses to the detriment of those holding opposite positions.
--With assistance from Soraya Permatasari
To contact the reporter on this story: Peter Vercoe in Sydney at pvercoe@bloomberg.net.
To contact the editors responsible for this story: Edward Johnson at ejohnson28@bloomberg.net, Marcus Wright
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