Australia's major banks face U.S. class action over rate rigging
- Top 10 News for 12/2: Crude Rips on OPEC Cut; Starbucks' Schultz Steps Down; Nonfarm Payrolls Flat in Nov.
- Unemployment Rate Drops to 4.6%
- Bond yields slip on U.S. jobs data, euro steady before Italy vote
- Alibaba (BABA) Founder Jack Ma Discuss Plans to Retire; 'I Don't Want to Die at the Office'
- Starbucks Coffee (SBUX) CEO Howard Schultz to Step Down, Appointed Executive Chairman; Kevin Johnson New CEO
A man walks past a branch of the Australia and New Zealand Banking Group Ltd (ANZ) in Sydney October 29, 2013. REUTERS/David Gray/File Photo
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here.
By Swati Pandey and Cecile Lefort
SYDNEY (Reuters) - Australia's four biggest banks said on Thursday they were among 17 global lenders being sued by U.S. funds for alleged benchmark interest rate rigging, denying the claims and pledging to contest the action.
The suit follows ongoing court action on the matter by Australian regulators, and comes amid increasing scrutiny by global watchdogs on potential market manipulation. Recent investigations have ensnared major global lenders and led to hefty fines.
In the latest suit naming National Australia Bank
Allegations center around the banks making hundreds of millions of dollars in profits by setting benchmark bank bill swap rates (BBSW) at levels that benefited their trading books, according to the filing, supplied to Reuters by one of the banks.
National Australia Bank, Australia's top lender, said in a statement it did not agree with the claims, while fourth-biggest ANZ Banking Group said it would vigorously defend the legal action.
No.3 lender Westpac said it was aware that a class action had been filed but was not formally served with any proceedings. "Westpac denies the allegations in this claim and, if served with the claim, will defend those allegations vigorously."
These three are already facing charges laid by the Australian Securities and Investments Commission (ASIC) for allegedly manipulating the same benchmark interest rates. All three have refuted the claims.
A spokeswoman for Commonwealth Bank of Australia - not named in the Australia action - said the nation's second-largest lender would defend the claim filed in court in the United States.
The BBSW is the primary interest rate benchmark used in Australian financial markets to price home loans, credit cards and other financial products.
Earlier this year, statements of claims filed in Australian courts by ASIC revealed rare evidence - including emails, phone calls and electronic chats - that demonstrated what the regulator said was a conspiracy among BBSW panel banks and brokers to fix the prices.
The banks "manipulated BBSW so frequently that traders often joked about how easy it was to fix the rate", according to the writ filed in the U.S. court.
"When one ANZ trader sarcastically commented 'lucky the rate sets are all legit and there is no manipulation within the Australian financial system', his colleague replied 'ahahah'," according to the U.S. filing.
(Reporting by Cecile Lefort and Swati Pandey; Editing by Shri Navaratnam and Kenneth Maxwell)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Yurts, cleats, coats: Dakota protesters dig in for brutal winter
- Italy votes in referendum with PM Renzi's future at stake
- Apple shows ambition to get into self-driving car race
Create E-mail Alert Related CategoriesReuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!