SYDNEY, May 9 — Commonwealth Bank of Australia today admitted to "unconscionable conduct" and said it would settle with the Australian corporate regulator over allegations it manipulated the bank bill swap rate (BBSW).
Australia's top bank also said it would acknowledge that it did not have adequate policies and systems in place to monitor the trading and communications of its staff in order to prevent that conduct, according to the statement.
“As part of the settlement, CBA will acknowledge that, in the course of trading on the BBSW market in Australia on five occasions between February and June 2012, CBA attempted to engage in unconscionable conduct in breach of the Asic Act,” the bank said in a statement.
The impact of the settlement, which totals about A$25 million (RM74.1 million), would be reflected in the bank's 2018 financial year results.
Under the terms of the settlement with the Australian Securities and Investments Commission (ASIC), CBA agreed to a A$5 million penalty, a payment of A$15 million to a financial consumer protection fund, and a A$5 million payment toward the regulator's costs.
CBA also agreed to enter into an “enforceable undertaking” with Asic, under which an independent expert will be appointed to review controls, policies, training and monitoring in relation to its BBSW business.
The bank and Asic will make an application to the Federal Court for approval of the settlement.
Asic filed a lawsuit in 2016 alleging three of Australia's top lenders had rigged the bank bill swap rate (BBSW) for profit between 2010 and 2012, and in January this year started legal proceedings against CBA over the allegations.
National Australia Bank and Australia and New Zealand Banking Group have already settled with the regulator, leaving only Westpac to defend itself.
CBA also faces potentially massive fines for thousands of alleged breaches of anti-money laundering and terror financing laws, although it has blamed a software glitch for the problems.
Australia's major banks are in damage-control mode after a series of scandals forced the government to hold an inquiry into the financial sector which has exposed widespread misconduct. — Reuters