| 31.01,18. 01:01 AM |
Commonwealth Bank involved in rigging key market interest rate, ASIC alleges
The man who first blew the whistle on dubious practices at the Commonwealth Bank condemns the appointment of new chief executive Matt Comyn.
Commonwealth Bank has become the latest bank embroiled in a rate rigging scandal, just a day after appointing a new chief executive.
The corporate watchdog has launched legal proceedings against CBA, alleging involvement in rigging a key market interest rate.
ASIC is alleging unconscionable conduct and market manipulation in relation to the bank's involvement in setting the bank bill swap reference rate (BBSW).
The BBSW is a benchmark rate used by the Australian financial market to price loans.
The allegations against CBA relate to the period between January 31, 2012 and October 2012.
ASIC is alleging that on three specific occasions CBA traded with the intention of affecting the level at which BBSW was set, to maximise its profits or minimise its losses.
CBA say they are rejecting the allegations and will defend the case.
Explainer: Rate rigging
How can the banks manipulate the bank bill swap rate (BBSW)? Read our explainer to learn how it affects you.
"As part of the industry-wide review into the trading activities of participants in the bank bill market, ASIC has today filed a claim against the Commonwealth Bank of Australia that alleges the bank engaged in market manipulation and unconscionable conduct in relation to the Bank Bill Swap Rate," the bank said in a statement.
"Commonwealth Bank has fully cooperated with ASIC's investigation over the last two years.
"Commonwealth Bank disputes the allegations made by ASIC.
"As this matter is before the courts, it is not appropriate to comment further at this time."
CBA proceedings follow cases against the rest of the big four banks.
ANZ and National Australia Bank reached settlements with ASIC last year. while a similar case against Westpac is currently before the courts.
ANZ and NAB agreed to pay $50 million each, including penalties, compensation and costs for attempted market manipulation between 2010 and 2012.
In approving the settlement, Justice Jayne Jagot delivered a scathing assessment of the banks' conduct, saying the public would be "shocked, dismayed and disgusted" by their behaviour.
Westpac decided to continue to fight the charges alone.
The news of the proceedings against CBA come the day after the bank revealed its new chief executive.
Insider Matt Comyn was appointed to replace Ian Narev from April 9.
Mr Narev announced his exit last year following a series of scandals, including money laundering charges brought by regulator AUSTRAC.
CBA has admitted to breaches of statutory disclosure laws but is defending other allegations.