Court fines Westpac $3m in rate rig case
A FEDERAL Court judge says he hit Westpac with a “clearly inadequate” $3.3 million fine for trying to rig a key interest rate because the law stopped him levying anything higher.
At the Federal Court in Melbourne yesterday, Justice Jonathan Beach said he was hamstrung from applying a greater deterrence.
“If I had been permitted to do so, I would have imposed a penalty of at least one order of magnitude above $3.3 million … but I am not free to do so,” he said. In his lengthy decision, Justice Beach said: “Clearly, this is inadequate, but there we are.”
Westpac last week revealed a cash profit of $8.07 billion for the year. CBA, NAB and ANZ paid a collective $125 million penalty when they settled their cases, rather than face court.
The Westpac penalty follows the decision in May by Justice Beach that found it engaged in “unconscionable” conduct in attempts to manipulate the bank bill swap rate – a lending rate between banks that influences interest rates paid by consumers and businesses.
Justice Beach yesterday said the fine he imposed would hopefully send the correct signal to the marketplace in terms of general deterrence.
The Australian Securities and Investment Commission had on Thursday sought to hike the fine from $3.3 million to $64 million, but failed.