ANZ, Macquarie slapped with $15m fine for attempted cartel conduct

The Federal Court decried the banks’ “deliberate and systematic” attempts at cartel conduct in the currency market.

ANZ was among several banks forced to set aside additional reserves and undertake a remediation program following the probe.

The Federal Court has ordered ANZ Bank and Macquarie Bank to pay a combined $15 million in fines after they admitted to several instances of attempted cartel conduct, tagged as “deliberate and systematic” by the court.

The development shores up an agreement reached between the competition watchdog and the two banks designed to settle the issue, with a $9m penalty for ANZ and a $6m charge for Macquarie.

The Australian Competition and Consumer Commission had instituted proceedings amid assertions attempts were made to influence the benchmark Malaysian ringgit fixing rate on a number of occasions in 2011.

Ahead of the Federal Court ruling, ANZ had conceded 10 instances of attempted cartel conduct and Macquarie had admitted to eight.

In his judgment today Justice Michael Wigney labelled the actions of the traders as a “very serious” conduct breach.

“There could be little doubt that the attempted contraventions … were very serious ... The conduct of the traders in question was deliberate and systematic,” he said.

“Attempts by banks and other market participants to fix prices or financial benchmarks in the financial system should be regarded as particularly serious contravening conduct. It is essential that market participants and the public generally have confidence in the integrity and efficacy of the financial system.”

ACCC chairman Rod Sims echoed similar sentiments, issuing a sharp rebuke to the banking giants.

“Two significant Australian banks have admitted that on several occasions their traders communicated with other banks in an attempt to influence the ABS MYR Fixing Rate. This conduct had the potential to undermine the integrity of foreign exchange markets and undermine healthy economic growth,” he said.

As part of the concessions the two institutions had noted a Macquarie trader, three ANZ traders and employees of several other unnamed Singapore-based banks discussed daily submissions to be made to the Association of Banks in Singapore (ABS) in relation to the benchmark rate for the ringgit.

They also confessed that on numerous occasions in 2011 the aforementioned traders attempted to make arrangements with other banks that particular submitting banks would make high or low submissions to the ABS in relation to the ringgit fixing rate.

Upon acknowledgment of the issue last month, ANZ said the three employees that “unsuccessfully attempted” to manipulate the ringgit fixing rate were no longer with the company.

“We have an obligation to ensure our people, both here in Australia and overseas, comply with the law at all times,” ANZ chief risk officer Nigel Williams said.

“While there is no evidence that forex benchmarks in Singapore were successfully influenced, we accept responsibility and apologise for the actions of our former employees.

“We have made significant improvements to our compliance, training and monitoring systems to ensure this does not happen again.”

The case had been investigated previously by the Monetary Authority of Singapore in 2013, which failed to find conclusive evidence of rate fixing.

However, ANZ was among several banks forced to set aside additional reserves and undertake a remediation program following that probe.

The action comes as the two banks face a wideranging US class action over the alleged manipulation of Australia’s benchmark rate, while the big four banks — ANZ, Commonwealth Bank, NAB and Westpac — are facing intense scrutiny from ASIC in relation to the same issue.