The ex-Goldman Sachs & JPMorgan trader who probably wasn't the best hire after all
When Australian bank ANZ poached Chris Corbett from JPMorgan in 2023, it was the sort of move that suggested serious intent. Corbett, who'd been the head of Australia rates trading at Goldman Sachs and who'd worked for ANZ previously before spending eight years at JPMorgan, is unlikely to have come cheaply. He joined ANZ as head of the Australian rates trading business, based in Sydney, and was the kind of prestigious addition a regional bank likes to boast about. Two years later, ANZ maybe regretting recruiting him at all.
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ANZ didn't immediately respond to a request to comment for this article, but Corbett is widely mentioned in last week's filing by the Australian Securities and Investments Commission (ASIC) with the Federal Court of Australia.
Yesterday, ANZ admitted to "unconscionable conduct" in relation to government bond trading, and agreed to pay $240m of fines related to this and three other complaints.
Last week's ASIC filing details Corbett's involvement in the issuance of $14bn of Australian government treasury bonds in April 2023, two months after he reportedly joined the bank. The bonds were sold at the lowest price of the day, and ASIC claims the Australian government lost money as a result and wasn't given an opportunity to delay the issue.
The court filing detailed how Corbett, together with Rakesh Jampala, the co-head of ANZ's fixed income business, sat in a segregated room to conduct the trades associated with the bond launch, with Jampala there to "provide guidance and supervision" to Corbett.
Corbett reportedly began hedging the transaction a few days before. However, Corbett and Jampala also needed to do a significant amount of hedging when the bonds were issued on April 19th 2023.
The chart below shows ANZ's hedging trades (relating to 10-year Australian bond futures) on the day. The Australian government's AU$14bn of bonds were priced at around 1.50pm, precisely when ANZ's selling was most intense.
Corbett and Jampala were allegedly aware of the pricing timeline. At 1.27pm, Darren Sloane, a director in debt syndicate at ANZ, informed Corbett and Jampala of the need to dial into a call with the Australian Office of Financial Management (AOFM) at 1.50pm. However, even while that call occurred, ASIC says the two men were selling large volumes of 10 year Australian bond futures on the market, driving the price down and pushing the interest rate up at precisely the moment the government bonds were priced. ASIC claims, "ANZ knew that that downward impact on price (and increase in yield) would be in its favour and to the detriment of the AOFM and the Commonwealth."
After the issue, Corbett reportedly complained to Sloane that he hadn't been given "any guidance on what communications were necessary / expected with the AOFM during the deal process." He said he would have been happy to "jump on a call" to discuss "progress and market dynamics."
Sloane still seems to be working for ANZ. The current whereabouts of Corbett and Jampala aren't clear. Anshul Sidher, ANZ's head of markets, "stepped down to pursue other opportunities" last week as part of a broader program of cuts, which are understood to be affecting the trading team disproportionately.
Sometimes hiring big names from Goldman Sachs and JPMorgan doesn't have the desired effect.
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