Westpac (ASX:WBC) - CEO, Peter King
CEO, Peter King
Source: Westpac
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  • The corporate watchdog alleges Westpac (WBC) engaged in insider trading and unconscionable conduct in its role during the acquisition of electricity provider Ausgrid in 2016
  • ASIC claims Westpac’s traders acquired and disposed of interest rate derivative products via a $12 billion interest rate swap transaction while possessing alleged inside information
  • Further to this, ASIC also accused the ASX-lister of unconscionable conduct for failing to disclose and inform a consortium of AustralianSuper and a group of IFM entities of its intention to pre-position its trading books prior to the execution of the swap transaction
  • The transaction is said to be the largest interest rate swap transaction executed in one tranche in Australian financial market history
  • The banking giant put out a statement today acknowledging the allegations and is said to be taking them “very seriously”
  • Westpac shares are up 0.5 per cent on the market, trading at $26.12

The corporate watchdog alleges Westpac (WBC) engaged in insider trading and unconscionable conduct in its role during the acquisition of electricity provider Ausgrid in 2016.

The claims pertain to WBC’s part in a $12 billion interest rate swap transaction with a consortium of AustralianSuper and a group of IFM entities during the privatisation of a controlling stake in Ausgrid by the New South Wales government.

ASIC alleges Westpac’s traders acquired and disposed of interest rate derivative products whilst possessing inside information in order to pre-position Westpac ahead of the execution of the swap transaction.

ASIC said the transaction remains the largest interest rate swap transaction executed in one tranche in Australian financial market history.

Broadly, the watchdog claims that Westpac’s trading occurred while it was in possession of information that was not generally available to other market and had the potential to impact the price of the swap transaction to the detriment of the consortium or the special purpose vehicle established for the buy.

Further to this, ASIC alleges the circumstances surrounding Westpac’s trading and its failure to disclose and inform the consortium of its intention to pre-position its trading books prior to the execution of the swap transaction, amounting to unconscionable conduct.

The banking giant put out a statement today acknowledging the allegations.

“Westpac takes these allegations very seriously and is considering its position having just received the Originating Application and Concise Statement of Claim,” the statement read.

“As the matter is now before the court it would not be appropriate to comment further at this time.”

Westpac shares are up 0.5 per cent on the market, trading at $26.12 at 1:06 pm AEST.

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