Two of Australia's largest banks will each pay $2.5 million and overhaul their foreign exchange procedures after the the Australian Securities and Investments Commission found traders on the banks' wholesale spot foreign exchange desks acted inappropriately.
The two banks, National Australia Bank (NAB) and the Commonwealth Bank of Australia (CBA) accepted enforceable undertakings to clean up inappropriate conduct in their respective wholesale spot foreign exchange businesses.
Both banks will also make a "community benefit payment" of $2.5 million to Financial Literacy Australia, with the money to be used to further financial literacy education.
Shared Confidential Information
The Australian Securities and Investments Commission (ASIC) investigation found behaviour between January 1, 2008 and June 30, 2013, that included a NAB employee on a spot FX desk overseas, and an employee of another Australian bank, sharing confidential information and entering offers into the trading platform without any legitimate reason.
In the case of CBA, ASIC found that the CBA employees on a foreign desk had acquired proprietary positions in a currency after gaining knowledge of large CBA fix orders in that currency.
ASIC identified other instances of inappropriate conduct and found both banks failed to ensure that their systems and controls were adequate to address risks relating to such conduct.
Independent experts have been appointed, as part of enforceable undertakings given by the banks, and will assess changes the banks make to their systems for monitoring conduct in their spot foreign exchange businesses.
