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Australian banking giant Westpac engaged in ‘unconscionable conduct’ in trying to rig benchmark interest rates four times, but was cleared of market manipulation, a court ruled Thursday.
Corporate regulator, the Australian Securities and Investments Commission, had claimed Westpac manipulated the bank bill swap reference rate (BBSW) 16 times between 2010 and 2012.
Two of the country’s other big lenders facing similar accusations – ANZ and National Australia Bank – made Aus$50 million (US$38 million) settlements ahead of trial last year while the Commonwealth Bank reached an in-principle agreement to settle earlier this month.
Westpac was only one to fight the charges.
Federal Court Justice Jonathan Beach said while Westpac engaged in ‘unconscionable conduct’ in trying to influence the BBSW on four separate occasions, the regulator had not proven they succeeded.
‘ASIC has not made out its case against Westpac under … the Corporations Act concerning market manipulation or market rigging,’ he said.
The BBSW is a benchmark used to set the price of Australian financial products such as bonds and loans.
The rigging scandal is only the latest issue to damage the reputation of Australian banks, which have been under increased scrutiny, with allegations of dodgy financial advice, life insurance and mortgage fraud.
It is not only Australian banks under the microscope, with a series of scandals globally in recent years such as rigging of the Libor (the London Interbank Offered Rate) interest rate and foreign exchange rates.