SYDNEY: Australia's biggest bank was taken to court by the corporate watchdog Tuesday over allegations it rigged the benchmark interest rate.
The action follows a two-year regulatory probe into the Commonwealth Bank of Australia (CBA) -- one of several inquiries into the bank launched by regulators as scandals have engulfed the country's finance industry.
The case filed by the Australian Securities and Investments Commission (ASIC) alleges that CBA engaged in "unconscionable conduct and market manipulation" when setting the bank bill swap reference rate (BBSW).
The BBSW is a benchmark used to set the price of Australian financial products such as bonds and loans.
ASIC claimed that on three separate occasions in 2012, 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".
CBA said in a statement it had "fully co-operated" with the investigation over the past two years and "disputes the allegations made by ASIC".
Australia's "big four" banks -- among the developed world's wealthiest -- have been under scrutiny in recent years amid allegations of dodgy financial advice, life insurance and mortgage fraud.
The CBA is already facing a civil case brought by Australia's financial intelligence agency AUSTRAC in August last year for alleged "serious and systemic non-compliance" of anti-money laundering laws concerning thousands of transactions.
AUSTRAC last month also accused the bank of failing to adequately monitor suspected terrorist financiers.
The August revelations sparked renewed calls for the government to initiate a full, wide-ranging investigation into the finance industry.
Prime Minister Malcolm Turnbull had long resisted Labor opposition calls for a royal commission into misconduct claiming it would be a waste of money, but Canberra finally relented in November saying the probe was needed to restore faith in the massively profitable banking sector.
Australia's three other major banks -- ANZ, Westpac and National Australia Bank (NAB) -- have also been investigated by ASIC over rate-rigging claims.
ANZ and NAB settled their cases before their trials began last October, with the banks paying Aus$50 million (US$40 million) each in penalties. Westpac's case remains before the courts.
The latest news comes just a day after the firm said its retail banking chief Matt Comyn would replace Ian Narev as chief executive.
Narev had faced calls to step down after the AUSTRAC revelations and had flagged his retirement by the end of the 2018 financial year.
CBA shares closed down 0.13 percent at Aus$79.09 in Sydney.
Comments
Comments are closed for this article.