A former high paid ANZ executive has launched an unfair dismissal case against the bank, accusing his former employer of punishing him for making complaints about the alleged manipulation of interest rates.

A former high paid ANZ executive has launched an unfair dismissal case against the bank, accusing his former employer of punishing him for making complaints about the alleged manipulation of interest rates.
Key points:

• Former ANZ executive Etienne Alexiou’s case is thought to be the first test of new whistleblower protections
• In his statement of claim, Mr Alexiou described a toxic male-dominated culture at ANZ
• ANZ said it would be defending the case and its former executive was dismissed for breaches of company policy

The case is thought to be the first test of new whistleblower protection legislation brought in following the Financial Services Royal Commission last year.
Etienne Alexiou, ANZ’s former Global Head of Balance Sheet Trading, claims he was targeted and eventually dismissed by the bank after raising a number of complaints about manipulation of a key interbank interest rate market known as the BBSW (Bank Bill Swap Rate).
ANZ fired Mr Alexiou for breaching bank policies by engaging in lewd and explicit conversations on the company’s chat system.
But Mr Alexiou has claimed the bank had other reasons to get rid of him.
In his statement of claim filed to the Federal Court he alleges the bank was aware he had been cooperating with the regulator ASIC in their investigations into BBSW manipulation and could potentially become a key witness.
‘We will tell the regulator what to think’
This is the second case brought by Mr Alexiou against his former employers, after he dropped a similar suit in 2016, citing the expense and stress on his family.
The case implicates senior figures in banking including NAB chairman Phil Chronican and current ANZ chief executive Shayne Elliott.
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According to the Statement of Claim filed in the Federal Court, Mr Chronican, who was then CEO of ANZ Australia and head of retail, attended a meeting with Mr Alexiou in 2011.
Mr Alexiou alleges he raised concerns during the meeting about a proposal to change the way variable interest rates were managed inside the bank to increase profits.
The proposal involved allowing ANZ to set variable rates on mortgages independent to the RBA cash rate.
Mr Alexiou alleges he warned the proposal may fall foul of the Australian Prudential Regulation Authority, and would constitute a breach of faith with mortgage holders.
He claims his concerns were dismissed by Mr Chronican, who said at the time: “We will tell the regulator what to think.”
Mr Chronican did not respond to the allegation.
“We do not comment on matters before the courts. This is an issue between ANZ and a former employee,” Mr Chronican said.
In the statement of claim, Mr Alexiou also alleges current ANZ CEO Shayne Elliott was aware of the bank’s strategy to profit from trading to manipulate the BBSW.
The BBSW is a benchmark used to set the interest on trillions of dollars in short-term loans between the banks, as well as many other corporate transactions.
It was supposed to be an independent rate, and was set by the market at the start of each trading day, during a five-minute window.
But the bank was accused of manipulating it and profiting from it. ANZ has always strenuously denied this.
The Statement of Claim filed by Mr Alexiou alleges ANZ CEO Shayne Elliott was involved in a proposal to increase funding limits for the Global markets division, allowing them to buy and sell bank bills in greater volumes and influence the market.
ANZ said in a statement that it will be defending the case.
It said Mr Alexiou was dismissed for significant breaches of company policies and that his current case is largely the same claim he withdrew after mediation in July 2016.
“Given this is now before the courts, we don’t have any further comment,” the company said.
ANZ was fined $50 million in 2017 after it admitted that it had attempted to manipulate the BBSW on 10 occasions between 2010 to 2012.
The bank maintained that only “a small number of traders” were involved.
Whistleblower describes toxic culture
Mr Alexiou was stood down from the bank in 2014 for swearing and making inappropriate comments using the online platform Bloomberg chat, which was internally monitored by the bank.
Shortly before being stood down he was awarded performance bonuses totalling $5 million on top of his $485,000-a-year salary.
He later apologised for the comments and said they were commonplace and taken out of context.
In his statement, Mr Alexiou describes a toxic male-dominated culture inside the Global Markets division at ANZ, including trips to strip clubs, lewd language referencing sex, drugs and alcohol, and claims strong swear words were commonly used in ANZ’s dealing room.
Last year, a Background Briefing investigation exposed the behaviour of one manager, Steve Bellotti, who was known for his drunken and sometimes bizarre antics.
Trips to strip clubs were not uncommon under his leadership, former traders from ANZ told the ABC.
He was also at the centre of a complaint involving the “manhandling” of a female analyst at a corporate event, which allegedly involved several ANZ executives putting their hands on her shoulders, preventing her from leaving, and repeatedly badgering her for her room number.
Mr Bellotti has previously not commented on questions regarding this incident.
He headed the global markets division and resigned from ANZ in 2015.
While ANZ has always denied deliberately manipulating the BBSW, it did admit to “attempted unconscionable conduct” by a small group of traders.
This conduct occurred in Mr Bellotti’s backyard as he headed up the team.