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You can find the current article at its original source at https://www.theguardian.com/australia-news/2018/jan/30/commonwealth-bank-traded-bank-bills-in-unconscionable-way-court-told
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| Version 2 | Version 3 |
|---|---|
| Commonwealth Bank traded bank bills in unconscionable way, court told | Commonwealth Bank traded bank bills in unconscionable way, court told |
| (about 14 hours later) | |
| Corporate regulator alleges bank created ‘an artificial price and a false appearance’ of market | |
| Australian Associated Press | |
| Tue 30 Jan 2018 06.43 GMT | |
| Last modified on Tue 30 Jan 2018 07.14 GMT | |
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| The corporate regulator has begun court action against the Commonwealth Bank, alleging it engaged in unconscionable conduct and sought to manipulate a key inter-bank interest rate. | The corporate regulator has begun court action against the Commonwealth Bank, alleging it engaged in unconscionable conduct and sought to manipulate a key inter-bank interest rate. |
| Just a day after CBA named its new chief executive, Australia’s biggest bank faces federal court action brought by the Australian Securities and Investments Commission (Asic) over alleged manipulation of the bank bill swap reference rate, or BBSW. | Just a day after CBA named its new chief executive, Australia’s biggest bank faces federal court action brought by the Australian Securities and Investments Commission (Asic) over alleged manipulation of the bank bill swap reference rate, or BBSW. |
| CBA is the last of Australia’s big four banks to be named in Asic action over alleged BBSW manipulation, with ANZ and NAB having settled cases and Westpac’s matter still before the court. | CBA is the last of Australia’s big four banks to be named in Asic action over alleged BBSW manipulation, with ANZ and NAB having settled cases and Westpac’s matter still before the court. |
| Asic alleges that, on three occasions in 2012, CBA traded bank bills in an “unconscionable” way that created “an artificial price and a false appearance” of the market for some products. | Asic alleges that, on three occasions in 2012, CBA traded bank bills in an “unconscionable” way that created “an artificial price and a false appearance” of the market for some products. |
| “Asic alleges that on three specific occasions 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,” the regulator said in a statement on Tuesday. | “Asic alleges that on three specific occasions 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,” the regulator said in a statement on Tuesday. |
| The regulator 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”. | The regulator 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”. |
| Bank bills are short-term instruments that banks use to lend to or borrow from other institutions, and the interest rate payable on a bill is affected by trading activity. | Bank bills are short-term instruments that banks use to lend to or borrow from other institutions, and the interest rate payable on a bill is affected by trading activity. |
| In its concise statement filed to the court and released on Tuesday, Asic alleges that CBA bought or sold bank bills during a morning trading window with the intention of affecting the rate in a way that favoured its own exposures. | In its concise statement filed to the court and released on Tuesday, Asic alleges that CBA bought or sold bank bills during a morning trading window with the intention of affecting the rate in a way that favoured its own exposures. |
| The regulator is seeking declarations from the court that CBA breached sections of the Corporations Act relating to unconscionable conduct, creating an artificial price and creating a false or misleading appearance in the market. | The regulator is seeking declarations from the court that CBA breached sections of the Corporations Act relating to unconscionable conduct, creating an artificial price and creating a false or misleading appearance in the market. |
| Asic has asked the court for pecuniary penalties and costs. | Asic has asked the court for pecuniary penalties and costs. |
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