CBA has agreed to an in-principle settlement with ASIC in civil proceedings relating to alleged manipulation of the BBSW in 2012.
The bank has acknowledged that, in the course of trading on the BBSW market in Australia on five occasions between February and June 2012, CBA attempted to engage in unconscionable conduct in breach of the ASIC Act.
CBA will also acknowledge it did not have adequate policies and systems in place to monitor the trading and communications of its staff in order to prevent that conduct from occurring.
Subject to Federal Court approval of the settlement, CBA has agreed to pay a $5 million penalty, a payment of $15 million to a financial consumer protection fund and a $5 million payment towards ASIC’s costs of the litigation and its investigation.
CBA will also enter into an EU with ASIC under which an independent expert will be appointed to review controls, policies, training and monitoring in relation to its BBSW business.
CBA and ASIC will make an application to the Federal Court for approval of the settlement.
The in-principle settlement follows decisions by NAB and ANZ to settle similar cases. Westpac was the only to bank to defend its traders in court, with a decision yet to be handed down.
I understand the struggles of small business, having been self employed for most of the last thirty years. What I don’t get with the banks, is based on a huge balance sheet, how they can’t simply identify these problems, and allocate a relatively minor amount of money to prevent rather than cure the problem.