In a bit of news that is tinged with irony, the Australian Securities and Investments Commission (ASIC) has been denied in court its record $35 million AUD fine against Westpac Bank.
Irony because the reason the court rejected the fine, in addition to the Commission’s failure to prove that Westpac was guilty of any wrongdoing, was that the Commission did not demonstrate to the court how it had calculated the fine – and the fine was in relation to Westpac’s alleged inappropriate calculations of consumer eligibility for mortgages. Miscalculations or improper calculations all around, and the watchdog comes out of court with rip in its fur.
This decision follows one earlier in the year in which ASIC was rejected an even higher assessed fine against the same bank, that time for inappropriate handling of negotiations regarding the bank bill swap rate. In that case, ASIC wanted $58 million AUD but, due to Westpac’s legal challenge to the fine, Justice Jonathan Beach agreed with Westpac that just 3 trades were veritably manipulative. ASIC believed that Westpac should pay a fine for each trade that happened on three days but Westpac felt it should only pay for the individual trades which were provably manipulative. Other banks in the same investigation paid fines $50 and $25 million respectively, without a fight.
The judge in that case, according to reporting much closer to the subjects, was essentially offended at the attempted broad strokes ASIC was trying to use, specifically their counsel’s use of the word “affront” in describing Westpac’s behavior, saying:
I think you are exaggerating here, Mr Crutchfield. You are the model litigant. You shouldn’t use that language with me – you are not in the royal commission. All the other flowery rhetoric I could do without, Mr Crutchfield.