ASIC grants ANZ trader whistleblower status as bond trading probe deepens

A trader who tried to raise the alarm about inflated turnover data and other conduct in ANZ’s markets division has been granted whistleblower status.

ANZ chief executive Shayne Elliott, left, and ASIC boss Joe Longo.

The corporate regulator has granted an ANZ employee whistleblower status after the trader raised concerns about conduct in the bank’s markets division, sources say, as a regulatory probe into a controversial $14bn bond issuance ratchets up.

The Australian understands the ANZ trader raised several matters with his employer regarding behaviour in the markets unit and bank staff providing inflated turnover data to the government’s debt management agency.

The bond issuance scandal has rocked ANZ, prompting the bank to bring in two law firms to assist in its own investigations. There have been consequences for some ANZ staff, including suspension, termination and a formal warning.

The Australian Office of Financial Management sits within Treasury and assists in the management of the government’s financing and debt portfolio.

In 2023 ANZ was the risk manager on a $14bn government bond transaction, a key appointment. Commonwealth Bank, Deutsche Bank and National Australia Bank also took part in the deal as joint lead managers alongside ANZ.

It is unclear whether the ANZ trader used official whistleblower channels at the bank to raise concerns, but sources said he attempted to escalate the matter.

The Australian Securities & Investments Commission noted the ANZ trader’s efforts to raise issues before assigning him whistleblower status and affording him additional protections.

The trader’s concerns form part of a probe by ASIC into the 2023 government bond issuance and how it was managed by ANZ.

The regulator has also served the bank with formal notices to produce an array of documents.

ASIC is probing irregular trading in the futures market as part of the transaction, with pricing of the 10-year bonds moving in an unfavourable way for the Australian government.

The Australian has chosen not to identify the ANZ whistleblower. An ASIC spokesman declined to comment on the matter, given the investigation is ongoing. An ANZ spokesman also declined to comment.

From 2019, whistleblower protections in the Corporations Act were expanded.

The bond issuance scandal has rocked ANZ, prompting the bank to bring in two law firms to assist in its own investigations. Picture: Getty Images

Macquarie banking analysts said ANZ faced a maximum penalty of about $780m if it was found guilty of unconscionable conduct, but the penalty could be much smaller.

The ANZ board has signalled potential action against the bank’s leadership team if its investigations or the regulators’ uncover serious wrongdoing or a lack of oversight.

ANZ chief executive Shayne Elliott last month said the board would “lead a process to ensure consequences” applied to appropriate senior executives, past and present, including himself.

The AOFM last year debriefed ASIC on the management, ­pricing and trading of the $14bn bond issuance in question, as is usual practice. In this instance, as part of the management of the deal, irregular trading was witnessed in the futures market.

The AOFM was also concerned about inflated turnover data provided by ANZ.

The ASIC investigation into ANZ became public in May this year, but the regulator has had the bank in its sights for some time.

Documents released under freedom of information show the AOFM supplied ASIC with copies of Bloomberg chat messages concerning ANZ on January 9, as the regulator ratcheted up the probe. An email from an AOFM staff member in the office’s funding, strategy & research team shows that the messages were supplied after a conversation with the regulator.

“Please let me know if you require any further information,” the AOFM staff member says.

This was soon followed by another round of correspondence between the AOFM and ASIC. The funding office supplied copies of past risk manager reports and minutes of selection meetings for the joint lead manager roles.

An ASIC letter shows the regulator assembled 22 documents concerning its investigation into ANZ’s role in the $14bn bond placement in the past year.

ASIC senior lawyer Haydar Tuncer said the disclosure of documents relating to the debt issuance “could reasonably be expected to alert parties to lines of enquiry to be pursued by ASIC”.

Originally published as ASIC grants ANZ trader whistleblower status as bond trading probe deepens