ASIC commences legal proceedings against CommBank

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Newly announced CommBank Chief Executive Matt Comyn will have his work cut out for him as the Australian Securities and Investments Commission (ASIC) commences legal proceeding against the bank for allegedly rigging key market interest rates.

 The watchdog is taking the bank to the Federal Court in Melbourne on claims of unconscionable conduct and market manipulation for its alleged involvement in tweaking the bank bill swap (BBSW) between 31 January and October 2012.

“ASIC alleges that on three specific occasions the Commonwealth Bank of Australia (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,” ASIC stated in a media release.

“ASIC alleges it was unconscionable for CBA to trade in this way, and also to enter into products priced off the BBSW without disclosing its trading practices to its customers and counterparties. ASIC also alleges that CBA’s trading created an artificial price and a false appearance with respect to the market for some of these products.”

CommBank is the last of the Big Four banks to face such charges. ANZ and National Australia Bank settled with ASIC, paying $50 million each including penalties, while the Westpac case is currently before the courts.

CommBank has denied the allegations and will defend itself against these allegations.

According to a CommBank statement: “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.

“Commonwealth Bank has fully cooperated with ASIC’s investigation over the last two years.

“Commonwealth Bank disputes the allegations made by ASIC.”

ASIC is seeking pecuniary penalties against CommBank and an order for increased compliance. Neither party is making any further comment during court proceedings.

Read more at www.asic.gov.au

Are you a CommBank customer? How do you feel about the bank’s alleged misconduct and unscrupulous behaviour? Is ASIC losing its ‘toothless tiger’ reputation?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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12 Comments

Total Comments: 12
  1. 0
    0

    How do I feel about the bank’s alleged misconduct and unscrupulous behaviour?

    The Director’s Board and the staff involved in this behaviour should face criminal charges. After all it’s Larceny, Deceptive conduct to make financial gain and Fraud isn’t it?

  2. 0
    0

    Another round of civil servants trying to show their mojo by more bank bashing.

    ASIC has never had a major success.

    Sack them.

  3. 0
    0

    CBA is not learning. They cannot do what they like and get away with it.
    Also, what a bad appointment as CEO – heard he is 42-year old current Head of Retail Banking! Retail Banking is where the ATM-based unreported large transactions (possibly related to terrorist funding) took place – thanks to bad management of software roll-outs by incompetent bank management.
    Also, do you think a 42-year old’s experience is better than say the hundreds of 55+ executives in various banks here & overseas who could have been chosen instead? Will a 42-year old hire people who are 55+ in roles reporting to him who might know the job better than him? Now you see how Age Discrimination works, and why CBA’s performance will go down!

  4. 0
    0

    I think they should pay a small fine and key players sacked if found guilty and be done with it

  5. 0
    0

    Just more bank bashing. I wish they would more onto some other industry and have a go at them instead.

    • 0
      0

      All banks are financially rapacious bastards and thoroughly deserve to be bashed. There are cogent reasons why the whole sector stinks to high heaven. But Rightards like you are not bright enough to see that, are they…

  6. 0
    0

    did not see ASIC taking on the now labor leader SHORTEN for selling out the members of his union to the big bussinesses for his own benefit! typical of a left thinking organisation!

  7. 0
    0

    Bank bashing what planet are you mob on . The greed is good gang in full cry . George is the only clear thinker so far the rest of you have not got a clue.

  8. 0
    0

    ALL banks are bastards. ALL of them should be targeted. A penetrating Royal Commission with sharp teeth and enforceable outcomes is needed into the entire financial sector.


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