ASIC files new claims against Westpac in rate-rigging case

ASIC has filed explosive new claims in its case against Westpac in which it alleges “unconscionable conduct and market manipulation” of Australia’s benchmark bank bill swap reference rate (BBSW).

On Friday, ASIC filed a new 58-page statement of claim which includes phone transcripts of Westpac dealers’ conversations during the period for which ASIC is investigating the bank.

The AFR reports the transcripts of a conversation on June 9, 2010 between “Westpac managing director Group Treasury Colin Roden, a ‘Mr Arkins’ and a person identified as ‘Matt'” include a discussion of where the impact of their actions is canvassed.

The transcripts suggest the dealers were aware that their actions could have some impact on customers:

And then in 2 years time there’s some enquiry that you have been f—ing with the rate set that’s cost them all 10 basis points and, you know what, leave me alone, its got nothing to do with me, right. That’s my biggest fear and that’s what I will express to them…

The unprofessional, unknown random you know with $50 million of debt that’s getting stitched up by his bank… that at some point wakes up and has a dummy spit and quite deservedly so.

ASIC’s claim also alleges Westpac sold a tranche of almost $500 million in bank bills on June 10, ASIC says, “with the sole or dominant purpose… of raising or maintaining the rate at which the 90-day BBSW set on 10 June and therefore at yields which did not reflect the forces of genuine supply and demand in the bank bill market”.

ASIC’s claim alleges Mr Roden said two days before the trade:

“… I’m going to f— them as well that’s why I don’t want to get… I’m going to f— the rate set right on the 10th…”

Read the full article at the AFR here.

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