Australian bank sued for ‘rate rigging’

Bloomberg

Commonwealth Bank of Australia is being sued by the nation’s securities regulator for allegedly rigging the benchmark bank-bill swap rate, adding to legal problems for the nation’s largest lender.
The Australian Securities & Investments Commission said it began legal proceedings on Tuesday in the Federal Court in Melbourne, alleging the bank engaged in “unconscionable conduct and market manipulation” between January and October 2012.
Commonwealth Bank is the last of the nation’s big-four lenders to face claims it manipulated the benchmark, the local equivalent of Libor. Australia & New Zealand Banking Group Ltd. and National Australia Bank Ltd. in November agreed to pay A$50 million ($40 million) each to settle. Westpac Banking Corp. is contesting similar allegations.
The suit adds to a list of problems facing incoming Chief Executive Officer Matt Comyn, who was named to replace Ian Narev.
Commonwealth Bank is also fighting allegations it systemically breached anti-money laundering laws, which have spawned a class-action lawsuit and a separate ASIC probe.
Commonwealth Bank disputed the allegations, it said in its response to the ASIC lawsuit. In its rate-rigging claim, ASIC alleges Commonwealth Bank had a large number of products priced or valued off the swap rate, and on three occasions traded with the intention of affecting the level at which the rate was set to maximize its profit or minimise its losses to the
detriment of those holding opposite positions.