ASIC accuses Westpac of insider trading

The allegations relate to Westpac’s role in executing a $12 billion interest rate swap transaction with a consortium of AustralianSuper and a group of IFM entities. The transaction occurred in 2016 and was associated with the privatization of a majority stake in AusGrid by the NSW Government.

ASIC alleges that Westpac knew or believed it would be selected by the consortium to execute the interest rate swap and that this was inside information.

“When the market opened at 8:30am, whilst in possession of the alleged inside information, Westpac’s traders acquired and disposed of interest rate derivative products in order to pre-position Westpac in anticipation of the execution of the swap transaction,” ASIC said.

“ASIC alleges that Westpac’s trading occurred while it was in possession of information that was not generally available to other market participants including those that traded with Westpac that morning. Prohibitions against insider trading are a fundamental tenet of market integrity.”

ASIC is seeking declarations and pecuniary penalties for Westpac’s alleged contraventions of the Corporations Act. Westpac acknowledged the proceedings and said that it was “considering its position”.