Australia's biggest bank admits wrongdoing in rate-rigging case

The Commonwealth Bank of Australia (CBA) has been engulfed in a string of scandals, including claims it broke anti-money laundering and counter-terrorism financing laws.

Published: 09th May 2018 10:23 AM  |   Last Updated: 09th May 2018 10:23 AM   |  A+A-

This file photo taken on May 1, 2018 shows a signage for Australia's biggest company, the Commonwealth Bank, is seen on a building in Sydney.  | AFP

This file photo taken on May 1, 2018 shows a signage for Australia's biggest company, the Commonwealth Bank, is seen on a building in Sydney. | AFP

By AFP

SYDNEY: Australia's biggest bank on Wednesday admitted to "unconscionable" behaviour and agreed to pay Aus$25 million (US$18.5 million) after a rate-rigging case was brought against it by the corporate watchdog.

The Commonwealth Bank of Australia (CBA) has been engulfed in a string of scandals, including claims it broke anti-money laundering and counter-terrorism financing laws.

The banking giant was taken to court by the Australian Securities and Investments Commission (ASIC) in January after a two-year probe -- one of several regulatory investigations launched into the country's scandal-plagued finance industry.

"In the course of trading on the BBSW market in Australia on five occasions between February and June 2012, CBA attempted to engage in unconscionable conduct in breach of the ASIC Act," the bank said in a statement.

The BBSW (bank bill swap reference rate) is a benchmark used to set the price of Australian financial products such as bonds and loans.

ASIC claimed that CBA "traded with the intention of affecting the level at which BBSW was set so as to maximise its profits or minimise its losses to the detriment of those holding opposite positions to CBA's".

As part of a settlement, the bank "will also acknowledge it did not have adequate policies and systems in place to monitor the trading and communications of its staff in order to prevent that conduct from occurring", it added.

The lender said it had agreed with the regulator to pay Aus$25 million in penalties, ASIC's court fees and a contribution to a consumer protection fund.  

It will also appoint an "independent expert" to review how it conducts its business relative to the BBSW.

The latest admission caps a difficult few months for the Commonwealth Bank.

Last week the nation's largest company admitted it had lost the financial records of close to 20 million customers in a major security error Prime Minister Malcolm Turnbull called "an extraordinary blunder".

The revelation came just days after a scathing report by the country's financial services regulator slammed CBA for a complacent culture and ineffective board.

Alongside Australia's three other major lenders -- National Australia Bank, Westpac and ANZ -- it is also under scrutiny in a royal commission looking into misconduct in the finance industry.

Stay up to date on all the latest World news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp