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Major Aus banks settle US class action but refuse liability
Two major Australian banks have settled a class action and have paid a settlement but stopped short of admitting liability for alleged market manipulation.
Naomi Neilson
Following allegations of manipulating the bank bill swap rate (BBSW) between 2010 and 2012, Commonwealth Bank (CBA) and ANZ Bank have separately agreed to settle a US class action without admitting liability. The terms of the settlement are confidential and both big four banks said the financial impact is not material.
The class action identified National Australia Bank (NAB), Westpac, Macquarie, two brokers and various other international banks as members of a panel that set the BBSW, which was then used to price trillions of dollars of assets.
As part of its own investigation, ASIC sued Westpac, NAB and ANZ in 2016 for the alleged market manipulation and unconscionable conduct before accusing them of fixing the BBSW to inflate profits over the period of two years. Shortly afterwards, ASIC then pointed the finger at CBA for its part in the misconduct.
In pretrial settlements, ANZ, NAB and CBA received a $125 million penalty. Westpac, who fought ASIC in court, was fined $3.3 million for engaging in unconscionable conduct by seeking to manipulate the BBSW on four separate dates between 2010 and 2012 but was not found guilty of market manipulation.
Claims against NAB were dismissed in February 2020 and Macquarie narrowly escaped the class action when it was excluded in March 2019. Last October, Westpac confirmed it had settled with the plaintiffs under confidential terms.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
