Rogue planners of Commonwealth Bank of Australia: Senate demands answers

[Torpedo]

...Isn't it called Conmanwealth Bank of Australia?

http://www.smh.com.au/business/banking-and-finance/rogue-planners-senate-demands-answers-20130619-2oir3.html

Rogue planners: Senate demands answers

June 19, 2013 - 3:56PM
Adele Ferguson and Chris Vedelago

The corporate watchdog will face a Senate inquiry into its performance that
is likely to embroil the Commonwealth Bank and raise questions about the
effectiveness of new financial reforms.

This kangaroo court of ASIC needs to confront a parliamentary inquiry.

A notice of motion was put in the Senate this afternoon by Nationals senator
John Williams and supported by ALP senator Doug Cameron and Greens Senate
leader Christine Milne, showing unanimous support from all sides of
politics.

Senator Cameron said the inquiry into the Australian Securities and
Investment Commission will be wide ranging, and given the scale of the
problem, it is "appropriate for the Senate to investigate a range of issues
including financial planners, the Commonwealth Bank and ASIC".

The motion, expected to pass unopposed, will be voted on in the Senate on
Thursday following revelations in Fairfax Media that the regulator took 16
months to act on information from whistleblowers about serious misconduct
inside the Commonwealth Bank's financial planning unit.

It also failed to act for three and a half years on information provided by
CBA in June 2009 about serious allegations of forgery and fraud by a
planner, who was allowed to continue to work in the industry during the
regulator's inaction.

"I will suggest to the committee that submissions open next month and we can
expect to have public hearings later this year," Senator Williams said. The
committee is expected to report to the senate in March 2014.

The inquiry's terms of reference are wide ranging, including an examination
of corporations legislation and whether it needs to be changed; a review of
the accountability of the regulator; the effectiveness of its complaints
management policies and practices and its approach to corporate and private
whistleblowers.

Jeff Morris, a CBA insider who revealed his identity to Fairfax Media said
whistleblower protection in his case consisted of "advising me to get out
with what I had left".

"When you choose to tread the path of the whistleblower you knowingly 'take
arms against a sea of troubles'," he said. "What you don't expect though is
for the odds against you to be lengthened by a Monty Pythonesque
regulator."

The CBA whistleblowers repeatedly contacted ASIC starting in late 2008 but
were never asked to participate in an investigation or reveal their
identity.

According to Mr Morris, the whistleblowers visited the headquarters of the
regulator 16 months later after becoming ''sick of waiting'' for action.
Within a month, ASIC had moved to seize CBA files. An investigator later
told Mr Morris that if they hadn't forced the issue their report might still
be ''bouncing around''.

Senator Williams said it was clearly a situation that ASIC is far too slow
to act. "The result is financial loss and stress placed on many
Australians," he said.

"Sixteen months to act on the Commonwealth Financial Planning issue is too
long. Years to act on Stuart Ariff [a liquidator who is currently serving
six years in jail] is too late. ASIC needs to lift its game and I am hopeful
that this enquiry will result in improvements to ASIC and how it performs."

But despite the wide-ranging political support for the inquiry, some
senators are demanding to know what role the Labor government has played in
allowing ASIC to become a ''kangaroo court''.

''ASIC is a problem as an agency. It's administration and management has
been of very serious concern to many in this parliament, and particularly in
this senate chamber, for some time now,'' Liberal senator David Johnston
said in the Senate today.

Senator Johnston questioned the Prime Minster Julia Gillard's decision to
give Greg Medcraft, ''a mate'', the $700,000 year job as chairman of ASIC in
violation of the government's own merit-based public sector appointment
process.

''What on earth is going on here? The corporate regulator is run by someone
who has a cloud over them. This kangaroo court of ASIC needs to confront a
parliamentary inquiry.''

The looming inquiry comes as ASIC has acknowledged that ''unacceptable and
unlawful conduct'' had occurred inside the financial planning arm of the
Commonwealth Bank.

But deputy chairman Peter Kell has defended the regulator's delay in
investigating the CBA matter as ''how law enforcement works''.

''I can understand why any investigation, whether it takes 12 months or 12
days, is never going to seem fast enough for those suffering the stress of
lost money. But CFP was a complex matter and cases like this involve much
background work before a public result is achieved,'' Mr Kell wrote in an
opinion piece published by Fairfax Media on today.

The inquiry is likely to also investigate new financial reforms that will
come into effect on July 1 known as the Future of Financial Advice.