Ex-ANZ trader Etienne Alexiou’s wrongful dismissal action a return to when market animals ruled
ANZ is being dragged back to 2011 when traders acted out a sleazefest of strip clubs and filthy humour. So, was a whistleblower muzzled?
Brothel visits on the corporate credit card. Work celebrations at strip clubs. Suspicious white substances found in the men’s bathroom. Jokes about prostitutes, drug taking and MILFs.
It could be straight from the script of The Wolf of Wall Street, but these are real revelations at the heart of one former trader’s case against ANZ.
And yet, to the ex-trader in question, Etienne Alexiou, these lurid details are essentially just a smokescreen. A fugazi, a wazy, a woozie – nothing more than fairy dust, to borrow a line from Matthew McConaughey’s sleazy stockbroker character in one of the film’s most iconic scenes.
For it is Mr Alexiou’s case that he was sacked for blowing the whistle on the bank’s intention to manipulate the bank bill swap rate for its own gain. In his eyes, he has been punished for calling out wrongdoing, his $5m bonus cruelly withheld.
But the bank maintains he was shown the door for breaking its code of conduct in a series of foul-mouthed messages he shared with colleagues and staff at other banks. Mr Alexiou’s case rests on the argument that these chats were merely a convenient pretext to get rid of him.
His lawyer, Christopher Withers SC, has submitted that not only did ANZ turn a blind eye to the type of lewd language exhibited in the chats, it actively tolerated a “toxic masculine environment” that enabled it to flourish. ANZ, of course, denies this.
Take, for example, the fact that a senior trader, who cannot be named for legal reasons, used an ANZ corporate credit card on three separate occasions at a Sydney brothel in 2007 while entertaining a client. His punishment? A formal warning.
Or ANZ’s former head of global markets Steve Bellotti, who performed doughnuts on the fairway of a golf course with colleagues in the back of his Porsche Cayenne during a booze-soaked conference in the Hunter Valley in March 2013.
The court heard Mr Bellotti had told an investigation into his conduct that: “If you’ve not driven under the influence, you are not Australian”. A year later he wrote to staff to remind them to adhere to ANZ’s code of conduct.
Shayne Collins, ANZ’s former head of market risk, was repeatedly asked if he thought Mr Bellotti was a good role model. “I don’t think he was a bad role model … I think this particular incident was very unfortunate and clearly there were consequences,” Mr Collins responded.
Upon starting at the bank in 2011, Mr Alexiou was himself taken to the Men’s Gallery strip club near Martin Place in Sydney’s CBD to celebrate by his boss, ANZ’s then global head of fixed income, Robert O’Callaghan and two female HR officers.
Or the fact that staff were reminded of the code of conduct policy in 2012, with particular attention drawn to its drug and alcohol language after a suspicious white substance was found in the men’s bathroom on the trading floor.
But Mr Collins did not agree with Mr Withers’ withering assessment.
“I didn’t believe it was toxic, but it was clearly a masculine environment,” Mr Collins told the court.
Alexiou’s Bloomberg ‘banter’ revisited
Kate Morgan SC, acting for ANZ, subjected Mr Alexiou to a gruelling five days in the witness box during week one of the trial.
She pored over the ex-trader’s Bloomberg chats, asking him to spell out what the acronym “MILF” stood for after a colleague had asked whether there were any at an induction day for his daughter at Ascham School.
“You thought it was okay to describe the mothers of your daughter’s school, mothers of your daughter’s classmates – as mothers you’d like to f--k?”, Ms Morgan thundered.
Although Mr Alexiou acknowledged some of the messages were “worse than offensive”, he insisted his family were not genuinely offended.
“I know my wife and daughter did not feel disrespected,” he said.
His wife has been by his side in the courtroom almost every day. His daughter has also been in regular attendance.
A lawyer, who had been acting for ANZ, described some of the messages as “banter”.
ANZ’s own investigation into possible market manipulation triggered a separate investigation, as senior management uncovered a slew of offensive messages between staff.
The court heard that of the 88 people ANZ identified in its probe, 25 were given informal counselling, 17 were handed official warnings and 11 were dismissed.
BBSW rate set recollections
Central to the case is what happened on the ANZ trading floor on September 30, 2011.
What is not in dispute is that something prompted an employee from the Reserve Bank of Australia to ring ANZ to ask if the bank had a funding issue.
Mr Collins, now chief risk officer at CBA, acknowledged in court that such a call was “pretty extraordinary”.
Mr Alexiou alleges that the following week he complained to his line manager, Mr O’Callaghan, about a trader who had been bragging that he was going to “slaughter the (BBSW) rate set”.
On Friday, ANZ’s former global head of risk management Fred Pucci told the court Mr O’Callaghan was “up to his eyeballs” in hearing such discussions.
“The point is not that Rob was made aware of the existence of the use of ‘slaughter’, the point is that Etienne objected to its use,” Mr Pucci said.
But when a subsequent search of the bank’s files was undertaken at Mr Alexiou’s request in 2014, no written record of his complaint could be found.
Nuno Matos’ Federal Court side show
ANZ settled with ASIC over the alleged BBSW rate-rigging for $50m in 2017, with the bank admitting a “small number of traders attempted to engage in unconscionable conduct on ten dates between September 2010 and February 2012”.
Yet, Mr Alexiou’s case threatens to blow it all open again. It has been over ten years in the making. He discontinued his original proceedings in 2016, citing pressure on his family.
The current trial, which is being heard in the Federal Court before Justice Nye Perram, still has another four weeks to run.
It has already hauled NAB’s chairman Philip Chronican into the witness box. Shayne Elliott, ANZ’s former CEO, is expected to appear.
For Nuno Matos, ANZ’s new teetotal CEO, the salacious headlines must be an unwelcome distraction as he gears up to unveil his new vision for the bank on Monday. His sole focus is on the bank’s future, yet this case will only keep dredging up its sordid past.
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