ASIC mounts civil action against Westpac

The Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings against Westpac for poor financial advice provided by one of its authorised representatives.

The regulator announced today it had commenced the Federal Court proceedings in relation to alleged poor financial advice provided by one of its former financial planners, Sudhir Sinha.

Court documents filed by ASIC show the regulator is alleging that in four sample client files selected by ASIC, Sinha breached the 'best interests' duty under the Corporations Act, provided inappropriate financial advice, and failed to prioritise the interests of his clients.

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Sinha provided financial advice in the Perth area as an employee of Westpac from 2001 to November 2014 and was banned by ASIC for five years in 2017 for failure to meet his ongoing advice obligations.

The civil proceedings against Westpac devolve from its status as Sinha’s licensee during the period in question and argue that Westpac is liable for the alleged breaches of the 'best interests' obligations by Sinha under section 961K of the Act.

ASIC also alleges that Westpac contravened sections 912A(1)(a) and (c) of the Act, which requires Westpac to do all things necessary to ensure that the financial services covered by its licence are provided efficiently, honestly and fairly, and to comply with financial services laws.

Section 961K of the Act is a civil penalty provision, and attracts a maximum penalty of $1 million per contravention.

ASIC noted that separately, Westpac has a significant remediation programme underway in respect of Sinha’s conduct and that Westpac had reported to ASIC that, as at 14 June 2018, it has paid approximately $12 million in compensation to clients impacted by Mr Sinha's poor advice and ongoing advice service failures. 


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This story is about the same Westpac adviser who totally screwed my old friends ( aged 71 and 74) in 2007-8 , not only on fees but risk that did not match their written preferences and by tying them in knots when their situation clearly and obviously required them to sit their million dollar of super in cash at call until a large property sale was settled etc. Just totally wrong. Also the SOA was appalling and failed just about every compliance point. We helped them write complaint but Westpac defended every point and made it plain that it would be my old friends vs the full force of Westpac lawyers if we took them on. So we did not go further . What do readers think I should do now, if anything, for my now 81 and 84 year old friends. I am now retired from authorised advising but doing occasional back office work for old colleagues,

Did they go to FOS/COSL or seek legal advice? Seems like they're past statutory time frames now, given it's 10 years on. Or...Are they still invested?

There is still time to make a complaint to the FPA. Westpac Financial Planning is a member of the FPA and specifically the professional partner program and you should specifically ask the FPA to investigate their member being Westpac Financial Planning. Their fees are bundled up as members fees so this very much implies that all FPA members must be complicit with this behaviour. I find it disgusting reading about FPA members getting away with this type of behaviour...and the FPA continually saying nothing about these large fee paying members. Are all FPA members like this?

stat time frames don't apply to financial advice...

Really? I didn't know that, is that for civil suits only?

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