The Royal Commission has uncovered many crimes by the banks and other financial institutions in just a couple of weeks but the key to getting long-lasting change is getting at the core problem and that is the politicians who are continually lying about what they knew and when. How can everyone else in country know for the past 10 years or more that the banks have major problems with corruption but the politicians didn’t?
Some recent media focus has been on the fact that the Royal Commission should have been held earlier and that is right, but the media need to go beyond the failings of the Liberal Party and have a good look at the Labor Party as well. The problems of widespread criminal conduct and fraud in the banking industry is not new and includes the time when Labor leader Bill Shorten was Minister for Financial Services and Superannuation from 14.9.10 to 1.7.13.
It must be remembered that the infamous Storm Financial collapse happened in January 2009 “with the loss of almost $3 billion in investor funds, leaving many among its 3000 former investors destitute.“ (Click here to read more)
And in March this year it was reported that the 2 directors responsible for leaving 3000 people “destitute” are facing pathetic fines after ASIC refused to file criminal charges against them.
“Emmanuel and Julie Cassimatis, the husband and wife founders of collapsed company Storm Financial — which left more than 3,000 clients destitute — are facing fines of $70,000 each under a Federal Court ruling.“ (Click here to read more)
The main point in raising the Storm Financial collapse is that is shows that the Labor Party and Liberal Party have failed for at least 10 years to address the scandalous corruption issues in the banking and finance industry when they clearly were aware of the problem as we all were. And ASIC have achieved nothing as well.
Former ASIC staff have started to blow the whistle:
ASIC has a culture of subservience and acquiescence when it comes to the big banks, says a former lawyer for the corporate watchdog.
James Wheeldon worked for ASIC as a junior lawyer for just under a year between 2004 and 2005, and said many of the same senior people were still in charge and nothing had changed.
“If I wanted to get a job with a bank, I’d go work for a bank instead of doing the banks’ work through ASIC,” he said.
“Having lobbyists from the banks working in the regulatory policy branch, advising ASIC on amending the law to benefit the banks — as far as current senior people at ASIC are concerned, that’s fine, there’s nothing wrong with it,” he said. (Click here to read more)
And another:
A former senior investigator at Australian Securities and Investments Commission has accused the regulator of lacking the “balls” to prosecute white-collar crime and criticised successive governments for poor appointments in the people chosen to run the organisation.
Barrister Niall Coburn, who spent a total of 13 years at ASIC in two stints between 1992 and 2012 and led high-profile criminal investigations, told Fairfax Media he had repeatedly warned his bosses they needed to take a harder line but was ignored.
“The basic thing is they haven’t got the balls. My bosses never had the balls to bring proceedings and if you were outspoken you were basically shut down and isolated,” he said. (Click here to read more)
Both the stories from the former ASIC employees are similar and point to the same thing and that is management at ASIC has been deliberately derelict in their duty in enforcing the law when it comes to the banks and their subsidiaries.
The SMH has reported:
“AMP lying to the regulator, CBA awarded the “gold medalist” for charging fees for no service, NAB caught false witnessing documents, client impersonation, inappropriate advice, Orwellian protection policies and a witness carted out on a stretcher after collapsing.”
“Criminal prosecution is now on the agenda.”
“In 2014 the then head of ASIC, Greg Medcraft, said Australia was a paradise for white-collar crime. He was right. What he didn’t say was ASIC was partly responsible for the cesspit of misconduct.” (Click here to read more)
What the SMH article misses is probably the biggest scandal uncovered by the Royal Commission so far and that is that the Australian Securities and Investments Commission (ASIC), who are the corporate cop for the banking and financial sector, have done virtually nothing for the last 10 years regarding criminal offences in relation to financial planners.
ASIC and their failure with policing financial planners
ASIC said it relied on negotiation with financial planning licensees to secure any penalty.
Despite mounting evidence of an industry rife with misconduct, ASIC has only pursued one criminal proceeding in the past 10 years, and has not issued any civil penalty orders against licensees since 2013.
Certainly evidence tabled in the hearing does not point to ASIC being hasty launch prosecutions.
- ASIC has never prosecuted anyone for failing to report a breach within the current 10-day limit, given high evidentiary standards needed and to give licensees more time to investigate the breaches
- ASIC has not instigated one civil penalty order in the past five years
- ASIC has only succeeded in getting two licence suspensions and two licence cancellations since 2013
- ASIC has launched one criminal case in the past 10 years
- ASIC has launched six civil penalty cases against licensees since 2013, when new legislation came into force allowing this course of action
- Since 2008 ASIC has issued 229 bans against financial planners, 46 per cent have been permanent. (Click here to read more)
It is well-known dozens if not hundreds of financial planners have committed fraud with customer’s accounts yet ASIC has instituted only one criminal case in 10 years, so it is no wonder the fraud in the industry is rife.
Fraud is a criminal offence so where have the police been?
How many hundreds or thousands of people have complained to ASIC over the last 10 years? If ASIC were never going to do anything did they advise the complainants to go to the police? If ASIC didn’t then they were involved in concealing criminal offences.
And I’m sure some people would have gone to the police. What did the police do? Refer them back to ASIC?
Failings of the media
A lot of the media have been quick to blame the politicians and ASIC which is fair enough, but they clearly need to look in the mirror as well. Like well paid lobbyists many so-called journalists actually lobbied against the Royal Commission when it was so blatantly obvious one was needed. On the other hand, there have been a few journalists who hooked in and drove the issue.
My past article including documents up to the CEO and no action
The biggest crime of all will be if the Royal Commission isn’t extended. There are thousands of people with stories to tell. One of the best from this website is a 2014 article where I emailed Westpac’s then CEO Gail Kelly with documented proof of fraud which were internal Westpac emails, so they couldn’t be argued against.
Westpac
I published a story in May 2014 titled: “Westpac CEO Gail Kelly knowingly conceals fraud at the bank court documents and emails show“.
Westpac CEO Gail Kelly and Chairman Lindsay Maxsted are up to the neck in concealing fraud by staff at Westpac. I have the documents to prove it including internal bank emails and an email sent to me on Mrs Kelly’s behalf which is in effect an admission. Both Gail Kelly and Lindsay Maxsted should be in jail for concealing a serious indictable offence.
The Westpac fraud is very similar in a lot of regards to the story this week on massive bank fraud by employees at the Commonwealth Bank which was on the ABC’s Four Corners program this week called Banking Bad. (Click here to read more)
Moving forward
So, while we can and should sit back and reflect on why Prime Minister Malcolm Turnbull, Treasurer Scott Morrison and Minister for Financial Services Kelly O’Dwyer didn’t act earlier and why there were so many failings on their watch we also need to be asking the same things about Bill Shorten and the Labor Party. Failure to do that means we could end up with the same problems in the future.
The way the government has protected the banks and other financial institutions is the same way the government has protected many corrupt lawyers and judges. The complaints fall into a hole and the complainants are worn down until they go away. But times are changing fast and disgruntled consumers can smell blood with the banks and won’t be backing off. Judgment day is finally coming.
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