This is up 288% from the A$159.4m secured for the compensation and remediation of consumers and investors in the period from 1 July to 31 December 2016.
Busy year
The latest report from the Australian watchdog outlines the enforcement results achieved by Asic during the period from 1 January to 30 June 2017.
There were 80 investigations completed and 57 commenced throughout the period, with 32 criminal charges being laid.
As a part of this, 23 individuals were removed from financial services and five were charged in criminal proceedings.
“The report covers some of the important work done by Asic over the last six months across a wide range of areas,” Asic commissioner Cathie Armour said.
“We will continue to detect misconduct and take enforcement action where necessary to ensure investors and consumers can have trust and confidence in our financial system,” Armour added.
Other enforcement outcomes over 1H17 included:
- 11 infringement notices issued;
- $1.4m infringement notices paid;
- 203 people charged in summary prosecutions for strict liability offences;
- 399 criminal charges laid in summary prosecutions for strict liability offences.
Banks’ FX woes
“Asic remains focused on addressing the risk to financial markets arising from poor gatekeeper culture and conduct,” the watchdog said in the report, highlighting the enforceable undertakings it has accepted from three of the country’s top banks – Westpac, Australia and New Zealand Banking Group (ANZ) and Macquarie – in relation to their wholesale foreign exchange businesses.
“We were concerned that, between 1 January 2008 and 30 June 2013, each of the banks failed to ensure that their systems and controls were adequate to prevent, detect and respond to inappropriate conduct.”
This included disclosing confidential details of pending client orders to external parties and inappropriately exchanging confidential and potentially material information about the banks’ or other institutions’ client flow or proprietary positions.
Under the enforceable undertaking, the three banks will each develop a program of changes to their existing systems, controls, training and guidance, and the framework for monitoring and supervising employees within their spot foreign exchange businesses.
In addition, Westpac and ANZ each made community benefit payments of A$3m, and Macquarie made a community benefit payment of A$2m. The community benefit payments will support independent programmes aimed at improving financial literacy.
Latest permanent ban
The report also highlights important cases and decisions taken by Asic during the first six months of the year, such as the permanent ban from the credit and financial services industries of jailed company director Gavin Keith Hyland.
Details of this decision – the latest in a series of bans announced since the beginning of the year – are contained in the report.
Hyland was the former director of Jacqalex Pty Ltd between 8 March 2010 and 4 November 2010. On 15 May 2017, the Brisbane District Court convicted him of two counts of dishonestly using his position to misappropriate investor funds.
Hyland “dishonestly applied A$104,110 of investor funds for personal use, including personal trading and using the funds to pay personal expenses and credit cards”.
The court sentenced Mr Hyland to two years of imprisonment for the first count of dishonesty, and a further one year’s imprisonment for the second count.
Subsequently, the court ordered that Hyland is released on a recognisance order after serving six months of his sentence, subject to good behaviour for a period of three years and that he provide security of A$3,000.
As a result of this conviction, Hyland was automatically disqualified from managing corporations for a period of five years.
In deciding to permanently ban Hyland from engaging in credit activities or financial services anymore, Asic “took into consideration the serious nature of the offences for which Mr Hyland was convicted”, it said in a note.
The disgraced former company director has the right to seek a review of Asic’s decision before the Administrative Appeals Tribunal.
