The corporate watchdog has started legal action against the National Australia Bank over its involvement in manipulating the bank bill swap reference rate.

The Australian Securities and Investments Commission (ASIC) said the case had been launched in the Federal Court in Melbourne with NAB accused of unconscionable conduct and market manipulation.

“It is alleged that NAB traded in a manner that was unconscionable and intended to create an artificial price for bank bills on 50 occasions during the period of June 8, 2010 and December 24, 2012,” ASIC said in a statement.

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ASIC said it was alleged NAB had a large number of products priced or valued off BBSW and that it traded in the bank bill market with the intention of moving the BBSW higher or lower.

“ASIC alleges that NAB was seeking to maximise its profit or minimise its loss to the detriment of those holding opposite positions to NAB’s,” it said.

The BBSW is the primary interest rate benchmark used in Australian financial markets, administered by the Australian Financial Markets Association and used to calculate business and personal lending rates.

Since September 2013, AFMA has calculated that rate electronically based on market data. Before that, the rate was calculated based on information from up to 14 banks based on interest rates they were paying and receiving each day.

ASIC began investigating manipulation of the BBSW in 2012. It’s already accepted enforceable undertakings from a number of overseas banks and it launched action against ANZ and Westpac in April.

ASIC said it was seeking declarations that NAB contravened the ASIC and Corporations Acts and unspecified pecuniary penalties.

Opposition Leader Bill Shorten said this was further evidence of the need for a royal commission into the banks.

“How many more people need to suffer and get ripped off before Mr Turnbull stops covering up for the banks?,” he said in a statement.