ASIC reviewing ‘best interests’ action against Westpac/BT
The Australian Securities and Investments Commission (ASIC) has reinforced the degree to which it is prepared to pursue litigation against the major banks and financial services companies, by signalling that it is not yet done with action against Westpac and BT Funds Management.
The regulator has announced that it is reviewing a Federal Court decision handed down just before Christmas regarding Westpac and its subsidiaries including that the firms had failed to do all things necessary to ensure that the financial services covered by their licenses were provided honestly, efficiently and fairly.
The difficulty for ASIC in the Federal Court judgement was that while the court found that Westpac Securities Administration Limited and BT Funds Management breached the Corporations Act it also found that ASIC did not make out its case that personal advice was provided to 15 customers.
ASIC commenced the civil penalty proceedings against Westpac in December 2016 following an investigation into the banking group’s telephone sales campaigns targeting superannuation fund members.
It said at the time that it was specifically setting out a case of 15 examples of alleged contraventions of the ‘best interests’ duty arising from the telephone campaigns during which it alleged that the firms provided personal financial product advice to customers by specifically recommending that customers roll out of their superannuation funds and into Westpac-related superannuation accounts.
ASIC said the matter would be returning to court early next month.
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
