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Commonwealth Bank of Australia is facing a new rate-rigging scandal

The Commonwealth Bank of Australia (ASX: CBA) is the latest big bank to face the wrath of ASIC in relation to the rate-rigging scandal.

Australia & New Zealand Banking Group (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB) were all accused of unconscionable conduct relating to the manipulation of the bank bill swap rate (BBSW).

NAB and ANZ previously agreed to settle with ASIC for figures believed to amount to $50 million each.

Westpac denied the claims and decided to fight allegations levelled against it as recordings re-emerged of one its traders claiming he would “f— the rate set”, as heard by the Federal Court.

Now the Commonwealth Bank has been called to answer for its alleged role in the scandal, adding to a list of incidents and allegations that have tainted Australia’s biggest bank over the past year.

A class action, funded by IMF Bentham Limited (ASX: IMF), was last year launched against the CBA by its shareholders in relation to a money laundering scandal.

For many, the latest allegations will come as little surprise for a bank that is becoming synonymous with questionable practices.

ASIC has commenced legal proceedings against the CBA for unconscionable conduct and market manipulation in relation to the bank’s involvement in setting the BBSW between 31 January 2012 and October 2012.

“During the relevant period CBA had a large number of products which were priced or valued off BBSW,” according to ASIC.

“ASIC alleges that on three specific occasions CBA traded with the intention of affecting the level at which BBSW was set so as to maximise its profits or minimise its losses to the detriment of those holding opposite positions to CBA’s.”

The CBA disputes the allegations made by ASIC.

“As this matter is before the courts, it is not appropriate to comment further at this time,” the bank stated.

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Motley Fool contributor Steve Holland has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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