NAB-ASIC rate-rigging deal expected

NAB was last night locked in talks with ASIC over rate-rigging allegations, sparking hopes of a deal.

NAB CEO Andrew Thorburn. Picture: Stephen Cooper

NAB was last night locked in talks with the corporate regulator over rate-rigging allegations, sparking hopes a deal will be announced to the Federal Court in Melbourne in coming days.

A deal with the NAB would leave Westpac as the last of the three banks originally sued by the Australian Securities & Investments Commission continuing to defend the regulator’s lawsuit.

The trial was due to begin on Monday, but was postponed when ANZ struck a deal with ASIC.

Details of ANZ’s deal, which will see it pay a penalty of more than $50m and admit wrongdoing, are likely to be released by the bank or the court at a later date.

NAB argues that although ASIC alleges it committed the most breaches — 50 to ANZ’s 44 — it has a stronger legal position because at the time of the alleged misbehaviour it had separate treasury and trading desks, unlike ANZ and Westpac.

Westpac has the fewest alleged breaches, 16, but at the time of the alleged market manipulation — 2010 to 2012 — also played host to Australia’s highest-paid and most influential interest rate trader, Colin “The Rat” Roden. ASIC has already handed over to the court reams of embarrassing phone and chat transcripts relating to Mr Roden, who now has a different role at the bank.

More evidence is likely to emerge if the trial goes ahead.

In one March 2010 chat message, Westpac trader Richard Conway told a rival at CBA, Garfield Lee, that “Rat was killing it”.

“Col is just killing it,” Mr Lee replied.

“Massive,” Mr Conway said. “He pushed it all the way to 4.10 and then all the way to 4.48.”

“F..k,” Mr Lee said.

In an April chat with Mr Roden, Mr Lee told him he had “the innocence of Pol Pot in 1980”. And in an obscenity-laden phone call to colleague Sophie Johnston the same month, Mr Roden boasted of making $12 million — “a good day” — and moving the BBSW.

“It was going to set at 30, right, then I got it down to 23 but I got it from f..king Goldman Sachs gave me 300 million,” he said.

Justice Jonathan Beach will this morning hear from the parties on how to proceed. He was originally to hear all three cases, but on Monday flagged that a different judge would need to be appointed to oversee the settlement between ASIC and ANZ.