Article: Westpac Probed by Regulator on Insider Trading Allegations

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Westpac Probed by Regulator on Insider Trading Allegations

Nabila Ahmed, 05 May 2021

Australia’s securities regulator is probing Westpac Banking Corp. on allegations of insider trading, just months after the country’s second-biggest lender paid a record fine to settle breaches of anti-money laundering laws.

The allegations relate to Westpac’s role in executing a A$12 billion ($9.3 billion) interest-rate swap transaction with a consortium of AustralianSuper Pty Ltd. and a group of IFM entities in October 2016, according to a statement on Wednesday from the Australian Securities & Investments Commission.

The probe comes after Westpac paid an A$1.3 billion fine for violating rules to prevent money laundering last year, capping a saga that dented the bank’s reputation and cost former Chief Executive Officer Brian Hartzer his job. Scrutiny on the nation’s biggest banks remains intense after years of scandals and a litany of misbehavior plagued the institutions at the heart of Australia’s economy.

“The sad reality is the banks are often absorbing remediation costs, litigation costs, and penalties,” said Nathan Zaia, Sydney-based analyst at Morningstar Inc. It’s too early to know whether Westpac will be fined, though “we don’t envisage it being large enough to materially damage the equity value of the bank,” he said.

Westpac said it’s taking the new allegations seriously and is considering its position. Shares ended Wednesday down 0.1% in Sydney.

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