The Federal Court has ordered Westpac to pay a $3.3 million penalty for its involvement in setting the BBSW in 2010.
The order follows Justice Beach’s judgment in May that found the bank had traded on four occasions in 2010 with a dominant purpose of influencing yields of traded Prime Bank Bills and where the BBSW was set in a way that was favourable to its rate set exposure.
In his judgment, Justice Beach said the bank’s misconduct was serious and unacceptable, and that Westpac had not shown the contrition of other banks.
“Moreover, imposing the maximum penalty is the only step available to me to achieve specific and general deterrence,” said Beach. “The message that should be sent is that if you manipulate or attempt to manipulate key benchmark rates you are likely to have the maximum penalty imposed, whatever that is from time to time.”
The Court also ordered that an independent expert be appointed to review whether Westpac’s current systems, policies and procedures are appropriate, and to report back to the Australian Securities and Investments Commission within nine months.