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Australia's Westpac fined $2.4 mln in rate case, fraction of penalty sought


Reuters


By Byron Kaye

SYDNEY, Nov 9 (Reuters) - Westpac Banking Corp won vindication of its decision to fight accusations its conduct in handling of a key rate was unconscionable as an Australian court fined it A$3.3 million ($2.4 million), far less than the sum sought by a regulator.

A federal court judge largely cleared Westpac in May of accusations it interfered with negotiations for an important internal price-setting measure called the Bank Bill Swap Rate (BBSW), but said its actions still amounted to unconscionable conduct. [nL3N1SV0B2}

"I have to apply the law as it was at the time, not what it should have been," the judge, Jonathan Beach, wrote in his judgment.

The relatively small penalty for the A$95 billion market capitalisation company brings a rare bright spot to an industry facing a daily drumbeat of negative publicity as a public inquiry into financial misconduct grinds on.

The inquiry has also drawn criticism about the effectiveness of Australia's financial regulators, putting pressure on ASIC to show it can rein in the industry.

Justice Beach said ASIC's argument that Westpac should pay A$58 million for 58 instances of wrongdoing had "all the irreconcilable atonality of a Schoenberg composition", an apparent reference to the 20th century expressionist composer Arnold Schoenberg.

A Westpac spokesman declined to comment on Friday. An ASIC statement quoted Commissioner Cathie Armour welcoming the decision, and saying: "ASIC's actions have led to these successful court outcomes, and also contributed to new benchmark manipulation offences being enacted by Parliament".

($1 = 1.3818 Australian dollars)




This article appears in: Stocks , Politics



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