Heat Ramps Up on ANZ Over Bond Trading Scandal
Posted by Colin Lambert. Last updated: July 26, 2024
ANZ says it has taken action against “several” employees on its Sydney Rates team over alleged breaches of its conduct rules, amidst an ongoing investigation into its actions around a major bond issue in 2023 that may include pre-hedging.
In an update on three “separate but related matters”, which include data reporting, conduct and behavioural “issues”, and the allegations over the 2023 bond transaction for the Australian Office of Financial Management (AOFM), ANZ CEO Shayne Elliott says, “Where we find any evidence of wrongdoing, those involved will be held accountable and action will be taken. The board will also lead a process to ensure consequences will be applied to senior executives, both past and present, including myself, where appropriate.”
ANZ has already admitted to providing the AOFM with inaccurate data on its secondary bond turnover – a criteria used by AOFM to select its book runners – an “unacceptable failure” it says was caused by “a range of issues including process and data extraction errors on ANZ’s part”.
On the subject of the issuance of the 10-year Treasury Bonds by AOFM in 2023, ANZ is a little more ambiguous. While the bank says it is working with local regulator the Australian Securities and Investments Commission (ASIC) to assist with its investigation into the trade, and has retained independent experts to analyse trading data around the issuance, both works remain ongoing. “ANZ’s own preliminary analysis has not identified any evidence of market manipulation,” the bank states, however, perhaps tellingly, it adds, “ANZ, however, does not have all the information that ASIC has, and this position will be reviewed in coming months.”
ANZ does not name the staff members disciplined over some or all of the alleged breaches, however it says it has suspended, terminated and issued formal warnings to “several” individuals. “My immediate priority is to ensure the investigations are completed in a
timely manner, that action is taken against any individuals who have not met the required
standards and that the necessary steps are taken to ensure these conduct failures do not
re-occur,” says Elliott. “Importantly, we are not limiting our reviews and will address any conduct that is not in line with our expectations.”