By Byron Kaye and Rishav Chatterjee
(Reuters) -Australian bank ANZ said it has fired or suspended traders from its markets business over allegations of inappropriate behaviour and warned an investigation into the unit may have consequences on staff all the way up to the CEO.
The update on Thursday shows Australia’s fourth-largest lender getting on the front foot over a scandal that has simmered for weeks since media reports said the corporate regulator was investigating suspected misreporting of trades in government bonds by the bank’s staff.
The bank has since confirmed it was cooperating with the investigation and said it was conducting its own review.
While the bank’s conduct and behaviour investigation was ongoing, it had suspended, fired or given warnings to several employees at its Sydney dealing room, it added.
“Where we find any evidence of wrongdoing, those involved will be held accountable and action will be taken,” said CEO Shayne Elliott in a statement.”
“The Board will also lead a process to ensure consequences will be applied to senior executives, both past and present, including myself, where appropriate,” he added.
ANZ said it had self-reported to the government that it logged incorrect bond trading data due to “process and data extraction errors” but its initial analysis had not identified evidence of market manipulation.
The bank said its reviews of the data misreporting, a bond issue and unspecified behaviour and conduct allegations within the markets unit were ongoing.
ANZ has told the Australian Office of Financial Management (AOFM) that it overstated the value of government bonds it traded by more than A$50 billion ($33.81 billion) over a one-year period, the Australian Financial Review reported.
The Australian Securities and Investments Commission (ASIC) subsequently opened an investigation.
ANZ has declined to confirm the accuracy of the figure.
Both ASIC and AOFM declined to comment.
“The big unknown at this point is – just how big is any potential financial fallout for the bank?” said market analyst Tim Waterer at KCM Trade.
“That’s the grey area that investors need to try and navigate between now and the completion of the ASIC investigation.”
($1 = 1.5253 Australian dollars)
(Reporting by Byron Kaye in Sydney and Rishav Chatterjee and Aaditya Govind Rao in Bengaluru; Editing by Alan Barona, Christopher Cushing, Christian Schmollinger and Sharon Singleton)
