'I gift wrapped Commonwealth Bank for ASIC and it did nothing'
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'I gift wrapped Commonwealth Bank for ASIC and it did nothing'

To have one bank go rogue may be regarded as unfortunate but to have them all go rogue smacks of carelessness. Or, to put it another way: one rogue bank is a bank scandal, when they all go rogue it is a failure of regulation.

What we are looking at now playing out in the Hayne royal commission is the final indictment of Australian Securities and Investments Commission's (ASIC) complete and utter failure as a regulator over the past two decades.

The revelation that AMP deliberately misled ASIC on no less than 20 occasions may be shocking but its deeper significance is what it says about the major players’ attitude towards ASIC as a regulator.

At a minimum it would suggest that they are not as afraid of ASIC as they should be.

Based on my own experience with ASIC over the past 10 years, I would go further and say that the big players treat ASIC with utter contempt.

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In my own case, way back in October 2008, I was one of the whistleblowers who gift wrapped and dropped into ASIC’s lap a major fraud at CBA’s Commonwealth Financial Planning, involving not just a rogue financial planner, “Dodgy” Don Nguyen but a management cover up to defraud the victims of compensation – which included sanitising the client files.

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CBA lied to ASIC and ASIC believed them, taking no action until March of 2010 – 17 months later – and then only after the whistleblowers turned up at ASIC and pounded the table to demand action.

In the meantime all the files had been sanitised. To this day ASIC refuses to accept that the file tampering ever took place- I guess to admit that possibility would make them look even more incompetent.

Even when ASIC did finally act it was through their usual limp wristed Enforceable Undertaking and a self administered compensation scheme which CBA shamelessly rorted.

ASIC did nothing to protect me from the wrath of CBA but when I left the bank in February 2013 it was with the firm intention of blowing the whistle publicly, not just on CBA’s corruption but on ASIC’s complacent uselessness as well.

In June 2013, after a series of shocking revelations by Fairfax Media, Nationals Senator John ‘Wacka’ Williams moved for a Senate Inquiry into ASIC and CBA and secured a unanimous vote in support.

I drove to Canberra to implore Mathias Cormann not to trust CBA.

When this inquiry reported 12 months later in June 2014 CBA’s story had completely fallen apart. They eventually had to had admit that they had ‘inadvertently misled’ ASIC about the compensation scheme under the Enforceable Undertaking whereby they had comprehensively deceived and ripped off the victims of what turned out to be a coterie of “rogue planners”.

The inquiry concluded that ASIC was a “timid and hesitant” regulator who could not be relied upon to hold CBA to account. They concluded that a Royal Commission into the CBA was warranted.

Immediately the then Abbott government hosed down any prospect of a royal commission. I drove to Canberra to implore Mathias Cormann not to trust CBA.

I told him that ASIC had trusted CBA who had then made monkeys out of them. I warned him that the same thing would happen to him. It was in vain, of course, three weeks before CBA’s annual general meeting, Cormann obligingly ruled out the royal commission in exchange for yet another self administered compensation scheme.

Jeff Morris warned the government not to trust Commonwealth Bank's assurances.

Jeff Morris warned the government not to trust Commonwealth Bank's assurances.

Photo: Rob Homer

To say this scheme was a farce would be unfair to farces everywhere.

Suffice to say that under this scheme CBA actually dictated to the victims who their “independent” customer advocates would be.

The significance of CBA being let off in 2014 after being caught in the most egregious misconduct is playing out in the royal commission today.

Incredibly, the other major players saw no reason to learn from what had been exposed and continued to operate financial planning businesses in the same way as the discredited CBA model.

Even more incredible is that, after being excoriated by the Senate Inquiry, ASIC has allowed them to get away with it. This raises the question as to whether ASIC has any clue as to what goes on in the industry.

Treasurer Scott Morrison has insisted ASIC is a tough cop.

Treasurer Scott Morrison has insisted ASIC is a tough cop.

Photo: AAP

The ticking time bomb for Scott Morrison’s “tough cop on the beat” is the fees for no service scandal.

Everybody in the industry knows that this was deliberate theft on the part of the big players. I blew the whistle on this in a submission to the Senate inquiry in May 2014.

Yet ASIC has gone along with this incredible story that the major players accidentally stole hundreds of millions of dollars from their clients due to a series of unfortunate accidents. Why?

Perhaps because the truth is too painful: that ASIC the regulator was the only one who didn’t know what was going on.

AMP has broken ranks on this and admitted they acted deliberately. Others will follow. The big question then will be: did they really lie to ASIC or was it ASIC that wanted to be lied to?