Sacked ANZ trader Etienne Alexiou may seek $50 million, questions remain over absence of star witness

Several big questions remain unresolved as the case brought against ANZ by sacked trader Etienne Alexiou hits its last stretch of witness testimony and final submissions over the next two weeks.

Why does neither side want to call the star witness key to the case? Why did ANZ bother to fight a case that has dragged its reputation through the mud, again? And could Mr Alexiou be awarded more like $50 million if he wins, rather than the $30 million figure widely quoted in the media?

Mr Alexiou claims he was sacked in September 2015 because he blew the whistle on the bank’s alleged manipulation of the benchmark BBSW interest rate used to price borrowing costs between lenders.

ANZ denies the claims and says he was fired for misconduct related to numerous lewd and inappropriate messages he sent on a Bloomberg chat platform and work email between 2011 and 2013.

In effect the bank’s position is that their decision to fire him was not related to ASIC’s escalating investigation into the BBSW scandal at the time.

Star witnessing missing

The bank also rejects Mr Alexiou’s claim his standing down in November 2014 and dismissal in September 2015 were linked to an email he sent in July 2014 to a manager that asked the bank to confirm it had a record of him raising a verbal concern about potential rate manipulation to his manager Robert O’Callaghan in October 2011.

Whether or not the verbal complaint was raised with Mr O’Callaghan in 2011 is important to Mr Alexiou’s claim.

Bizarrely, neither ANZ’s legal team, nor Mr Alexiou’s legal team, have chosen to call North Sydney resident Mr O’Callaghan to the witness box to tell Justice Nye Perram if he recalls the alleged conversation, or not.

Mr O’Callaghan could blow-up either side’s case in an instant by contradicting Mr Alexiou’s statement of claim, or ANZ Bank’s agreed statement of facts.

The logical inference is that both sides have pigeon holed him in the potentially “hostile” witness camp.

Mr O’Callaghan left ANZ in 2013, and the failure to call him is unsatisfactory given he could’ve been key to supporting Mr Alexiou’s claim he was a whistleblower, or complainant, entitled to protection under the Fair Work Act, Corporations Act and Banking Act.

$30 million or $50 million claim?

Some of this week in court will see expert witnesses give evidence on how much Mr Alexiou may be owed assuming his compensation claim succeeds.

What’s known on the record is that Mr Alexiou will seek compensation for around 110,000 ANZ shares he forfeited when he was dismissed. Those shares were granted as part of his incentive program in 2012 and 2013. Today they would be worth around $3.7 million.

The sacked trader is also claiming for a $2.05 million lost cash bonus in 2014 and around $2.95 million in lost equity grants the same year for total pay of $5 million lost in 2014.

These two documented amounts in the claim only total about $8.5 million and exist under the contract law principle of estoppel, which prevents one party from contradicting previously agreed contract terms.

Multiple sources connected to Mr Alexiou’s legal team confirmed last week it’s expected any damages awarded would see a reduction applied for contingencies. In effect, the judge would discount any award for the fact future bonuses and performance many years out are very uncertain.

Mr Alexiou’s basic salary (including super) was only $460,000 in 2013 so any claim for lost earnings would be heavily reliant on unknown lost bonuses.

However, it’s also expected Mr Alexiou’s team will argue he would’ve been promoted to the level of top ANZ bank earners Eddie Listorti, and Steve Bellotti over the long term, alongside seeking aggravated damages.

However, even assuming Mr Alexiou earned $5 million a year in wages and bonuses for 10 years, to take his losses to $50 million, discounting this by 40 per cent would result in damages of $30 million.

Something like $30 million compensation for ANZ to pay would’ve been a relatively small amount. It would also have ended more public embarrassment over strippers and drugs.

A deal would also have saved an unhappy looking bunch of ANZ executives - including former CEO Shayne Elliott - from having to take the witness box in October. The bank’s own legal costs will also be adding up, versus the risk it may lose the case.

Mr Alexiou could also have saved himself massive legal costs, the emotional burden, and time.

Falling outs, ANZ will have option to appeal

So why couldn’t the parties settle as with other claims? The impression of bad blood and personal feuds between multiple parties at the bank and Mr Alexiou has run through the decade-long dispute.

Both sides have also publicly complained that once the lewd headlines and employee names involved in the rate rigging investigation made the media in 2015, it became harder to reconcile the parties, as the trust gap widened.

ANZ may win the case later this month, but if it does lose and large compensation is awarded, the bank would have the option to appeal it to a Full Federal Court of three judges.

Any potential decision to appeal, or not, will be another test of new CEO Nuno Matos’ resolve to move the bank on from past problems as he seeks to implement radical change in culture and operating performance.