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Australia’s major banks face US class action over rate rigging
Posted On Aug 18 2016
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Australia’s largest lenders and 11 worldwide banking peers are being sued by funds in a United States lawsuit over alleged manipulation of the South Pacific nation’s benchmark swap rate.
National Australia Bank, ANZ Banking Group and Westpac Banking Corp have all been named in documents filed in NY by two USA investment funds and an individual derivatives trader.
No.3 lender Westpac said it was aware that a class action had been filed but was not formally served with any proceedings.
MELBOURNE, Australia-A lawsuit filed in the US accuses Australia’s biggest banks and a number of global investment banks of fixing Australia’s primary interest-rate benchmark.
ANZ said it will “vigorously” defend itself against the complaint that has been brought by two US -based funds and an individual derivatives trader.
Westpac denied the allegations in the claim and said that if served, it would defend the allegations vigorously.
“When one ANZ trader sarcastically commented “lucky the rate sets are all legit and there is no manipulation within the Australian financial system”, his colleague replied “ahahah”, according to the US filing. Macquarie declined to comment.
NAB and ANZ have been named in a U.S. class action related to trading in the bank bill swap rate.
Both banks, along with Westpac Banking Corp, are already facing charges laid by the Australian Securities and Investments Commission (ASIC) for allegedly trying to profit by manipulating the same benchmark interest rates.
Since 2012, the regulator has been investigating banks’ trading dating back to 2007 in Australia’s bank-bill swap-rate market, the benchmark used in the country’s markets. The class action has been filed in the US District Court for the Southern District of NY. The probe came after rate-fixing scandals elsewhere, including one over manipulation of the London interbank offered rate, or Libor.
ASIC has not yet launched action against the Commonwealth Bank but is expected to do so in the near future.
