Adds details of lawsuit, background on prior case
May 5 (Reuters) - Australia's corporate watchdog launched an insider trading lawsuit on Wednesday against Westpac Banking Corp WBC.AX, alleging that the bank's traders bought and sold derivative products ahead of a $12 billion interest rate swap deal in 2016.
The Australian Securities and Investments Commission (ASIC) said that on Oct. 20, 2016, Westpac knew or believed it would be selected by a consortium of AustralianSuper and a group of IFM entities to execute the interest rate swap transaction that morning, information that was not public.
Earlier that morning, the consortium had signed an agreement with the New South Wales government to buy the majority of electricity distributor Ausgrid.
Westpac's traders acquired and disposed of interest rate derivative products in order to pre-position Westpac in anticipation of the execution of the swap transaction, the ASIC said.