Former ANZ boss: ‘Slaughter’ term in BBSW rate case was ‘problematic’
Former ANZ CEO Shayne Elliott said the alleged use of the word ‘slaughter’ on the bank’s trading floor was ‘problematic’, but has defended the decision to sack an ex-trader for lewd chats.
The former boss of ANZ conceded a trader’s alleged use of the word “slaughter” to do with a key interest rate benchmark was “problematic” and he would have asked further questions had he known about it.
But Shayne Elliott, who stepped down as chief executive in July and was giving evidence in the Federal Court on Friday during Etienne Alexiou’s long-running wrongful dismissal case against ANZ, ultimately defended the bank’s decision to fire Mr Alexiou because he “broke the code of conduct blatantly”.
“That was not an unreasonable outcome in terms of process or severity of the consequences,” Mr Elliott added.
ANZ maintains it fired Mr Alexiou in 2015 for foul-mouthed chats he shared with colleagues and peers at other banks, but the now hedge fund boss claims he was sacked for blowing the whistle on attempts by ANZ to manipulate the bank bill swap rate (BBSW).
Central to his case is his claim that in October 2011 he told his then line manager, global head of fixed income Robert O’Callaghan, of his concern that traders were bragging about “slaughtering” the rate set.
Mr Elliott, who served as ANZ’s CEO for almost a decade before Nuno Matos took over, accepted that the alleged use of the word was “problematic” and would warrant further investigation.
But asked by Mr Alexiou’s lawyer Christopher Withers SC, if the use of the word “potentially frames an intention to manipulate the rate set”, the former bank boss demurred.
“It’s hard to know … It’s a word that can mean all sorts of things. But certainly it would be worthy of further investigating,” Mr Elliott told the court.
Mr Elliott, who sported a beard and described himself as “retired”, accepted that if Mr Alexiou’s claim was true, he would have liked to have known about it when the Australian Investments & Securities Commission was investigating BBSW manipulation in 2014.
“If he did say it, yes, it would have been beneficial to have known it,” he told the court.
Mr Withers put it to the former CEO that the bank would have known of the alleged “open and frequent use of the term slaughter” in relation to financial markets, because Mr Alexiou had complained about it three years earlier.
“Maybe,” Mr Elliott responded.
He was reminded that he was played recorded phone calls between ANZ traders where phrases such as “(I’m going to) get f.cking c.nted on some of these rate sets” and “belt the rate set” was mentioned, amid other colourful language.
“I was surprised to hear it (the language) on the recordings,” Mr Elliott told the court.
Mr Withers, SC, shot back: “What did you do about it?”
Mr Elliott said he did not recall. Asked whether he took action to remind traders of the appropriate use of language, he said: “I don’t recall. I don’t believe I did that.”
Over a gruelling morning in the witness box, Mr Elliott answered “I don’t recall” at least 45 times.
At one stage, Mr Withers put it to him that the answers he was giving were “just not true”.
Mr Elliott only occasionally appeared exasperated.
“With respect, I see thousands of documents, I can’t remember all of them,” he told the court.
The court also heard that ANZ trader Matthew Morris took a call on September 30, 2011, from an employee at the Reserve Bank of Australia who was inquiring whether the bank had a funding problem.
Mr Elliott said such a call would “trigger further inquiry”. But, as chief financial officer at the time, he would not have had oversight over such an investigation.
He was also quizzed about historic offensive messages Mr Morris had sent, including “I like punching Chinaman” and references to “chinks”.
“Do you know what ‘chink’ is a reference to?” Mr Withers asked.
Mr Elliott responded: “A derogatory racial term.” Mr Withers was attempting to argue a “massive disparity in treatment between” Mr Alexiou and Mr Morris, given they both sent offensive messages.
Mr Morris’s messages, previously read to the court, included: “fark, I didn’t know you were a chink”, “stupid bitch why else would I buy a dog”, “I shoot the bastard” and references to “gay and poof”.
According to Mr Morris’s LinkedIn, he started in Mr Alexiou’s old role as head of balance sheet trading at ANZ in October 2017, later rising to senior adviser for global markets, and left the bank in late 2024.
The court heard how Bob Santamaria, ANZ’s former general counsel, considered Mr Alexiou’s claim that he raised concerns about the word “slaughter” a “transparently false story” in an email he sent to Mr Elliott and the bank’s chairman David Gonski after finding no written record of it.
Mr Santamaria also described Mr Alexiou as “quite calculating”.
In 2017, ANZ admitted a handful of traders had attempted to engage in unconscionable conduct, settling with the corporate regulator for $50m. Mr Alexiou is seeking an undisclosed sum in compensation, believed to be in the tens of millions.
The trial, which is in its fourth week of six, continues.
