Westpac’s star trader Colin “the Rat” Roden told a Reserve Bank official the bank was up to “no bloody mischief at all” in the bank bill swap rate market, during the period in which it stands accused of trying to rig the key benchmark interest rate.
The federal court on Tuesday released a series of transcripts of taped conversations in the Australian Securities and Investments Commission’s landmark case against the bank, after hearings in the trial concluded this month in Melbourne.
Alongside talk about the markets, the transcripts also show one conversation in which Mr Roden asked another trader, Sophie Johnson, if a meal out she had with a female friend and another woman was a “threesome”.
Among the dozens of transcripts is a call between Mr Roden and RBA official Matt Boge, from June 9, 2010, in which Mr Roden points to “nefarious activity” from a rival, National Australia Bank.
ASIC has accused Westpac traders of trying to manipulate the bank bill swap rate (BBSW), a key interest rate that influences the rate paid on business loans. on various occasions between April 2010 and June 2012. Westpac has defended the behaviour of its traders.
In the call, Mr Boge asks Mr Roden “What have you guys been up to?,” to which Mr Roden replies “Mate, no bloody mischief at all.”
“I know, ah, someone rang through earlier on just wanted to know what happened this morning, whether we were involved in some nefarious… some nefarious activity, that 500 offer, because someone asked, that was the NAB,” Mr Roden said.
In the conversation, Mr Boge also questions Mr Roden about the volume of bank bills being traded in the market. In recent years the RBA has repeatedly raised concerns about the low volumes of bills being traded when BBSW is measured each morning.
Mr Roden tells Mr Boge the offshore funding markets have “bloody closed”, and that futures markets and bank bill markets are “completely out of whack”.
He also reveals RBA deputy governor Guy Debelle, who at the time had oversight of financial markets, had made contact with Westpac Treasurer Curt Zuber and was “hassling” him about funding.
“Curt’s f—ing hassling me ’cause Guy Debelle has been giving him shit,” Mr Roden said.
The conversation was one of many released by Federal Court Justice Jonathan Beach on Tuesday, following requests from media outlets.
In another, on April 8 2010, Westpac trader Sophie Johnson tells Mr Roden she had dinner with a friend and another woman on the previous night.
Mr Roden replies; “Was it a threesome, you know what I mean?”
Ms Johnson laughs in reply, saying “ah, not quite”.
Shortly after, Mr Roden asks: “Did the friend give you the kiss on both lips or just the big one on both cheeks or the big one on the lips?” Ms Johnson replies: “No, two cheeks.”
In the high-profile case, ASIC has alleged that Westpac tried to manipulate the “rate set”, a five-minute window between 9.55am and 10.00am in which BBSW was set by commercial banks.
In another conversation that was central to ASIC’s case, Mr Roden and Ms Johnson (dubbed the “the perfumed steamroller”), discuss the rate set.
Mr Roden says “I knew it was completely wrong but I thought f— it, I may as well f— it.” In the case, Westpac’s lawyers argued Mr Roden was commenting on where interest rates at the time, not trying to rig the rate.
The same conversation shows Mr Roden referring to Goldman Sachs as “f—ers” and NAB as “scum” and “deadshits”.
In a sign of the profits being made in the dealing room, Mr Roden tells Ms Johnson earlier that the bank had made $12 million that day from BBSW trading, which he describes as “a good day”.
ASIC had also alleged traders from National Australia Bank and ANZ Bank tried to rig BBSW, but these banks each settled for $50 million, admitting that their traders engaged in attempted unconscionable conduct.
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