ASIC has Westpac in crosshairs over rate rigging

THE corporate cop will this morning detail its rate rigging case against the nation’s oldest lender, Westpac, after two other banks accused of similar actions stitched up a settlement worth an overall estimated $ 100 million.

The Sydney- based lender is accused of rigging an interest rate that plays a pivotal role in the nation’s economy – known as the bank bill swap rate.

And the deals struck by NAB and ANZ with the Australian Securities and Investments Commission will be fully revealed on November 10, before Federal Court judge Jayne Jagot, it was decided yesterday.

Both Melbourne lenders have agreed to admit to “unconscionable conduct” in try- ing to rig the benchmark rate between 2010 and 2012, and each will cop a $ 50 million fine.

ASIC had accused NAB, ANZ and Westpac of rigging a key inter- bank lending rate to profit at the expense of customers. Westpac is expected to come under particular heat as Philip Crutchfield QC for ASIC turns the light on the bank’s top money market trader Colin Roden, nicknamed by some in the industry as “The Rat”.

Mr Roden features prominently in transcripts of emails and other communications lodged by ASIC in the court last year, in which he uses often colourful language and seems to boast of moving the BBSW. Westpac will open its defence this Thursday.

It is likely Mr Roden will appear as a witness on either No- vember 13 or 14. It is believed that much of the Westpac defence will hinge on the bank arguing that ASIC has misconstrued many of those boasts. The Westpac case will also focus on “it is not illegal to swear”.

A decision in the case is likely early next year. All eyes will turn to ANZ and NAB next Friday when details of their agreements are released.