ASIC has commenced legal proceedings against Westpac for “unconscionable conduct and market manipulation” in relation to the bank's involvement in setting the bank bill swap rate (BBSW).
In a statement, ASIC said it has started proceedings in the Federal Court in Melbourne against Westpac.
“It is alleged that Westpac traded in a manner intended to create an artificial price for bank bills on 16 occasions during the period of 6 April 2010 and 6 June 2012,” the statement said.
“ASIC alleges that on these days Westpac had a large number of products which were priced or valued off BBSW and that it traded in the bank bill market with the intention of moving the BBSW higher or lower.”
“ASIC alleges that Westpac was seeking to maximise its profit or minimise its loss to the detriment of those holding opposite positions to Westpac's.”
ASIC has sought from the court pecuniary penalties against Westpac and an order requiring Westpac to implement a compliance program.
In March, the corporate regulator commenced legal proceedings against ANZ, indicating that the bank had also engaged in “unconscionable conduct and market manipulation” in setting the BBSW.
ASIC said it will be making no further comment at this time.
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