ANZ trader alleges chat messages that got him fired were described by bank lawyer as ‘entertaining’
ANZ was warned it would ‘go down’ by a watchful rival according to chat messages described in Etienne Alexiou’s blockbuster wrongful dismissal case. He contends he was sacked for DMs that ANZ’s own lawyer found ‘entertaining’.
A Commonwealth Bank trader taunted ANZ whistleblower Etienne Alexiou with a message saying “dodgy little bank like ANZ might go down” if its alleged role in rate rigging was discovered by the market regulator.
Mr Alexiou was sacked by ANZ for foul-mouthed chats he exchanged with colleagues and his counterparts at other banks, but he contends he was wrongfully terminated for complaining about the bank’s intention to manipulate the bank bill swap rate for its own gain.
An external lawyer hired by ANZ allegedly considered the offensive and derogatory messages sent by Mr Alexiou “entertaining”, the Federal Court heard on Wednesday.
The case, before Justice Nye Perram, previously heard CBA trader Garfield Lee had messaged Mr Alexiou around the same time: “I can imagine ANZ and CBA compliance guys reading this chat.”
Mr Alexiou responded: “Mmm, not exactly sackable”.
ANZ maintains it fired Mr Alexiou because of the crude messages he shared with colleagues and staff at other banks over the Bloomberg system. The court has heard puerile references to “MILFs”, strip clubs, alcohol abuse, masturbation and homophobic sleights over the past two weeks.
A lawyer at Clayton Utz acting for ANZ in its own investigation into the trading floor found the chats “entertaining” during a meeting with Mr Alexiou and Shayne Collins, ANZ’s then head of market risk, on October 31, 2014, the court heard.
“Do you recall during a meeting with Mr Alexiou that Mr Slater (the lawyer at Clayton Utz) … saying that he found Mr Alexiou’s chats entertaining?” barrister Christopher Withers, SC, who is representing the whistleblower, asked.
Mr Collins, who is now chief risk officer for institutional banking and markets at Commonwealth Bank, said he did not remember such a comment. Asked whether anyone in that meeting had raised “the offensive nature of his communications”, Mr Collins said: “I don’t remember that being the case.”
Mr Collins also said he did not recall telling Mr Alexiou that his chats would be the subject of a separate conduct review.
The lawyer in question is Jonathan Slater, now a partner at Clayton Utz. Mr Slater declined to comment given he is a witness to the proceedings and is expected to give evidence later this week.
Central to the case is the bank bill swap rate (BBSW) action of September 30, 2011. The trial has already heard that a Reserve Bank of Australia employee rang the ANZ trading floor on that day to ask whether the bank had a funding issue. On Tuesday, Mr Collins acknowledged that such a call was “pretty extraordinary”.
On Wednesday, the court also heard that CBA’s Mr Lee had been tasked with writing a report about suspicious trading activity on that date.
During a “post mortem ‘biatching’ about BBSW” several days later, Mr Lee wrote to Mr Alexiou: “Dodgy little bank like ANZ might go down”. Mr Lee subsequently was stood down from his role at CBA.
Mr Alexiou submits that he raised his concern about an ANZ trader using the word “slaughter” in relation to the rate set with his line manager Robert O’Callaghan in early October 2011.
Mr O’Callaghan, who was then ANZ’s global head of fixed income, later told Mr Alexiou “the issue had been looked into and was fine”, court documents allege.
On Wednesday, Mr Withers raised an email Mr Alexiou had sent to ANZ managers on July 18, 2014 asking for any recorded documents or details related to his 2011 complaint.
Mr Collins said he did not remember the email, nor anything that may have come of it.
Mr Withers told the court that ANZ staff were instructed to perform a search of internal systems for the words: “complaint, whistleblowing, rate set, slaughter”. The search returned 34 results between Mr Alexiou and Mr O’Callaghan, the court heard.
Mr Withers argued it “suggests he (Mr Alexiou) raised something in the nature of whistleblowing about the use of the word slaughter”.
Mr Collins also could not recall whether anyone had actually contacted Mr O’Callaghan, who left ANZ in 2013, to confirm Mr Alexiou’s complaint about hearing ANZ would “slaughter” the rate set.
Mr Withers suggested to Mr Collins that he and “others at the bank” did not follow-up with Mr O’Callaghan because that would be a “very unhelpful fact to report to ASIC”.
But Mr Collins disagreed, insisting that there were “a lot of unhelpful facts” around the bank’s failures regarding the surveillance of traders’ conversations.
He admitted under cross-examination on Tuesday that ANZ had a “blind spot” in relation to Bloomberg chats.
The case continues.
Former Labor frontbencher Ed Husic criticised ANZ in parliament on Wednesday, suggesting the bank should have been handed a “bigger” fine than the $240m penalty brokered by ASIC for behaviour including “acting unconscionably” in a $14bn government bond auction unrelated to BBSW.
“If ANZ did not even blink to do this to the Commonwealth, imagine how they are treating mum and dad consumers,” Mr Husic told parliament, reading out a list of fines the bank has copped.
“While $240 million is big, it could and should have been bigger,” he volunteered.
The penalty was the largest ever imposed by The Australian Securities & Investments Commission.
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Originally published as ANZ trader alleges chat messages that got him fired were described by bank lawyer as ‘entertaining’
