Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry
A scathing review of Australia’s financial sector has been handed down in the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The report is the culmination of a 12-month inquiry that consisted of seven rounds of public hearings and over 10,000 submissions.
The report contains 76 recommendations put forward by Commissioner Kenneth Hayne AC QC. The government has announced that it will act on all 76 of the recommendations.
What is the Royal Commission?
The commission was established in December 2017 to ascertain “whether any of Australia’s financial services have engaged in misconduct,” and if so, whether criminal or other legal proceedings should be instigated.
The Hon Kenneth Hayne AC QC was appointed Royal Commissioner. He brought a wealth of legal knowledge to the commission having served as a Justice of the High Court of Australia between 1997 and 2015.
The Royal Commission exposed significant misconduct, some of which included:
· Billing deceased individuals for financial advice
· Lending money to people who had no capacity to repay their loans
· Deliberately misleading regulators
· Fraudulent documentation
· The fee-for-no-service scandal
In his 950+ page report, Justice Hayne pointed the blame directly at the boards and senior management of the companies involved. He also emphasised that those who engaged in malpractice should be held to account. “Misconduct will be deterred only if entities believe that misconduct will be detected, denounced and justly punished,” he said.
The report has shaken the industry, in what has been labelled a “deepening crisis” for the senior management of the companies involved. On Thursday evening, NAB’s chairman, Ken Henry, and chief executive, Andrew Thorburn, resigned from their positions after being named in the report.
Justice Hayne highlighted the innate public interest in cases involving financial misconduct on the part of large companies, noting that “the Australian community expects … that financial services entities that break the law will be held to account”.
His ruthless assertion that “saying sorry and promising not to do it again has not prevented reoccurrence, the time has come to decide what is to be done in response to what has happened” accompanied a list of 24 cases of misconduct to be referred to regulators. Regulators will decide whether to pursue criminal prosecution for the matters. They will also decide whether civil action should be taken. There are no charges as yet.
ANZ, NAB, CBA, AMP and Westpac are already expected to pay at least $850 million in compensation for the ‘fees-for-no-service’ scandal.
Our lawyers have experience in and have appeared at Royal Commissions, and in matters where charges have followed Royal Commissions. If you need advice or representation for a criminal matter, please call Hamilton Janke Lawyers 24 hours a day, 7 days a week on 4038 1666 (office hours) or 0422 050 502 (24/7).