Westpac has been ordered to pay a $9.15 million penalty as a result of Federal Court action initiated by the Australian Securities and Investments Commission (ASIC) over poor financial advice.
ASIC announced today that the Federal Court had imposed the penalty in respect of 22 contraventions of section 961K of the Corporations Act relating to poor financial advice provided by a former Westpac financial planner, Sudhir Sinha, in breach of best interests duty and related obligations.
The court held that Westpac was directly liable for the breaches.
It said the decision came as a result of civil penalty proceedings brought by ASIC against Westpac in June, last year, after an investigation revealed internal Westpac review, including an internal bank investigation in 2010, had raised concern about Sinha’s compliance history yet he continued to receive several high achievement ratings.
ASIC deputy chairman, Daniel Crennan QC noted that Westpac, as Sinha’s responsible licensee, failed to properly monitor and supervise him for a period of time.