Rate rigging trial digs into meaning of ‘f**k the rate set’

A judge has questioned just what exactly a Westpac trader meant when he said he was going to “f**k the rate set”.

The Westpac Bank logo is reflected on the floor of a shopping centre in Sydney, 28/07/2011.

A judge has questioned why Westpac’s star trader Col “The Rat” Roden said he was going to “f**k the rate set” if he wasn’t intending to manipulate the benchmark bank bill swap rate (BBSW).

Mr Roden made the remark in a June 2010 phone call with another Westpac trader, Zac Sharma, parts of which were under scrutiny in the Federal Court this morning.

The Australian Securities and Investments Commission has accused Westpac of trying to rig the BBSW on 16 occasions between 2010 and 2012.

At the time, the BBSW, which is used to set lending rates across the economy, was set during a furious five minutes of trading between Australia’s big banks and financial institutions.

Counsel for Westpac, Matthew Darke, SC, said there was nothing there to suggest trading for the purpose of raising the BBSW in the call between Mr Roden and Mr Darke.

“Mr Roden recognises it [his proposed trading] will have an effect on the rate set,” Mr Darke said. “There’s nothing wrong with that.”

Justice Jonathan Beach asked why Mr Roden said he was “going to do something” with the rate set.

“He’s talking about the effect of delivering into the futures close-out,” Mr Darke replied.

Justice Beach asked: “Why’s he talking about ‘F’ the rate set?”

Mr Darke said it was “colourful language” but all Mr Roden was saying that he was aware the trade would affect where the BBSW was set.

Justice Beach asked whether Mr Roden was “just talking about the consequences of his delivery, rather than making a purposive statement”.

Mr Darke said that was correct.

Mr Roden and two other Westpac executives, treasurer Curt Zuber and trader Sophie “The Perfumed Steamroller” Johnston, are due to give evidence in a fortnight.

Westpac denies all ASIC’s allegations.