ANZ has been ordered by the Federal Court to pay an $80 million penalty for unconscionable conduct relating to services provided to the Australian Government during a syndicated bond issuance, and a $50 million penalty for incorrectly reporting bond trading data to the AOFM over a two-year period.
The Australian Office of Financial Management (AOFM) welcomes the Court’s findings and the decision to apply a significant penalty.
AOFM Chief Executive Officer Anna Hughes said, “The Court’s findings are important for maintaining confidence in Australia’s sovereign debt program. We welcome the decision and will continue to work with market participants to uphold high standards of conduct.”
The Australian Securities and Investments Commission and ANZ jointly referred the matter to the Federal Court. The referral noted that ANZ:
- Acted unconscionably in its dealings with the AOFM while contracted as duration manager for a $14 billion syndicated bond issuance in April 2023.
- Incorrectly reported bond trading data to the AOFM over a two-year period, overstating volumes by tens of billions of dollars.
ANZ earned $9.98 million in revenue as duration manager and a $2.8 million fee as Joint Lead Manager on the transaction. ANZ has offered to pay an amount equal to its earnings as duration manager.
The Commonwealth Government did not consider accepting any payment while the matter was before the Federal Court.
“Now that the matter has been finalised, we will consider whether we are able to accept ANZ’s offer. We will engage with relevant Commonwealth counterparts and with ANZ to determine next steps.” Ms Hughes said.
Since the issue was identified following the April 2023 bond issuance, the AOFM has not invited ANZ to participate in any further syndicated bond issuance.
Ms Hughes reiterated today, “Given the findings, the AOFM will need to see clear evidence of improvement in ANZ’s risk culture before it can be considered for future syndications.”
The AOFM will not be making any further comments on this matter.
Media contact: enquiries@aofm.gov.au
