Alexiou, O'Connor revelations prompt ANZ crackdown on misbehaving bankers

ANZ Bank said it would sack or impose financial penalties on misbehaving bankers as sacked bond salesman Patrick O'Connor said he would reveal more about the toxic culture on the dealing floor.

In an internal memo sent to the 1000-strong global markets division, ANZ chief risk officer Nigel Williams said the bank would "take action" in the form of dismissals, warnings or claw-back bonuses of senior staff if they were found to have breached its code of conduct. 

ANZ has knocked back as many as 90 loan applications as part of its tougher foreign income criteria.
ANZ has knocked back as many as 90 loan applications as part of its tougher foreign income criteria. Photo: Jessica Shapiro

The memo was in response to reports in the Australian Financial Review that two former senior staffers had launched court action against the bank claiming they were unfairly dismissed for breaching the code of conduct.

One of the staffers, the former head of fixed income Patrick O'Connor, is suing the bank after he was sacked for abusing his corporate credit card. 

Etienne Alexiou has dropped his case for unfair dismissal against ANZ.
Etienne Alexiou has dropped his case for unfair dismissal against ANZ.  

Mr O'Connor defended his use of the company credit card in a media statement, claiming that the personal use was a "tolerated practice throughout the senior ranks of the bank" so long as the funds were repaid.

Mr O' Connor ran up over $37,000 of expenses over a one-year period including an $18,000 purchase of rare gold coins, a rent payment and healthcare payment and various hotel charges.  


He also claims that he spent more of his "own money on bank expenses on his private card than the other way round".

In a separate claim, the former head of balance sheet trading Etienne Alexiou, who was fired in September 2015 for "highly inappropriate and offensive electronic communication", is suing the bank for $30 million in withheld payments, shares and the loss of future income. 

Strippers and drugs cited

His termination letter cited illicit references to strippers and drugs in over 400 electronic communications from 2011 to September 2013. 

Mr Alexiou was among seven traders stood down by ANZ in November 2014 as part of a regulatory investigation into potential manipulation of key market interest rates, but as yet no evidence of wrong-doing was found and dismissal was ultimately unrelated. 

Both Mr Alexiou and Mr O'Connor claimed that a culture within ANZ's senior markets division either condoned or encouraged actions that would have breached the official code of conduct.

In a court filing, Mr Alexiou described how a line manager suggested a white substance being found in the male toilets should be sprinkled on a birthday cake while inebriated senior staff damaged a golf course in the Hunter Valley at an off-site gathering.

Mr O'Connor claims ANZ "created, supported and encouraged" the "toxic and unsafe culture" and in a statement on Friday warned of more revelations.

"As my legal case progresses, full and extensive details of what went on in the senior ranks of the ANZ Bank will be revealed so that my behaviour can be seen in context," he said in a media statement on Friday. 

Breach of act alleged

In addition to claims that the actual or living culture within ANZ was at odds with the official code of conduct, Mr Alexiou claimed that the bank had acted unethically towards clients and investors, including a potential breach of the Corporations Act.

Mr Williams said the matters raised in the court filings had either been investigated or were under current investigation. He told staff the claims made against the bank were inaccurate.  

The bank also told staff it would "vigorously" defend the court actions and would investigate all cases brought to its attention by its own management, monitoring or those raised by current and former staff.  

Mr Williams also encouraged staff to report breaches of the code of conduct or use the "whistleblower protection policy" if appropriate.

The explosive court allegations suggest a culture of excess within the upper echelons of the bank's global markets division, which includes the highest paid staff within the bank. Mr Alexiou, for instance, received a $5 million bonus in 2014, just days before he was officially stood down as part of the regulatory investigation. 

An ANZ spokesman said the culture matters were "now historic" but said the bank was not complacent and has been working hard to "ensure we have a consistently ethical and values based culture within global markets".