‘Lying’ bank bosses may face penalties and prison

Font Size:

In the strongest signal yet that bank executives could be forced to take responsibility for their unlawfulness, the Treasurer yesterday morning hinted that they could be imprisoned.

Scott Morrison told journalists that banking and financial services executives who lie to the corporate regulator could face penalties, including jail time.

The tough call follows two days of stunning admissions from AMP financial advice chief executive Jack Regan that the investment juggernaut had misled the Australian Securities and Investments Commission (ASIC) on at least 20 occasions.

Commonwealth Bank private wealth chief Marianne Perkovic also fronted the banking royal commission and acknowledged that Commbank had, like AMP, also been charging for financial advice that was never delivered to clients.

But unlike Ms Perkovic’s reluctant admission, Mr Regan readily agreed that AMP had been less than ethical.

The confessions were extracted by Michael Hodge QC, Senior Counsel assisting the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, during his interrogation over AMP’s 90-day fee policy.

Mr Regan revealed AMP was knowingly charging some clients for financial advice they were not receiving, in contravention of ASIC regulations.

The ABC reported yesterday that Mr Morrison was “deeply disturbed” by revelations emerging from the royal commission.

“They have said that they basically charged people for services they didn’t provide and they have admitted to statements that were misleading to ASIC and to their own customers, and this is deeply distressing,” Mr Morrison said.

“This type of behaviour can attract penalties which include jail time. That’s how serious these things are.

“I am very reassured by the fact that these matters were already being pursued by ASIC and will continue to be pursued by ASIC.”

The corporate watchdog followed the Treasurer’s remarks with a statement that it had been investigating AMP, but would not comment at this stage.

Yesterday morning, it was another AMP executive, John Keating, who felt Senior Counsel Hodge’s blowtorch, this time over wealth management platforms that appeared to put clients into a holding pattern.

“You knew that they were being charged a price uncompetitive with the market, but decided not to adjust your price?’’ the barrister asked, to which Mr Keating replied: “That’s correct.”

According to ABC reporting, AMP’s Platform Development Head then explained that the company was “focused on its newer products, but it appeared to have made no/little attempt to move existing customers from the more expensive legacy products to better value newer ones”.

Tweeting on the legacy products, Fairfax reporter Sarah Danckert wrote: “AMP’s wealth management platforms sound like the Hotel California. You can check in, but you can never leave (without paying a massive capital gains tax bill).”

The other major banks will front the royal commission in coming days.

Opinion: Should bank boards get away with disrespecting your super?

The damage to AMP’s brand during the banking inquiry grilling this week has naturally translated into a shredding of the stock’s value.

News service Reuters’ graph illustrates and compares how the stock prices of the Big Four banks and AMP have fallen since the royal commission was announced … and it ain’t pretty.

AMP shares have lost $3 billion in value since early March. Put another way, the $1 slide to yesterday’s closing price of $4.45 is equal to $500 million in losses a week over the past month and a half.

Being one of Australia’s biggest financial services companies, you can bet your bottom dollar many if not most superannuation funds, including yours, will own a slab of AMP. While the share rout will not bankrupt super funds, your savings will likely take a hit.

With all the brouhaha around how the Big Four and AMP have ripped millions of dollars off customers for fake advice, there hasn’t been anywhere near as much of a murmur about how those saving for retirement have also been burnt.

Maybe it is time for those sitting in Mahogany Row – the chairpersons and directors on the boards – to answer questions. While it is all very satisfying to watch bank executives being grilled, at the end of the day they are employed to make money and enrich shareholders.

And even if they do get chastised by the corporate watchdog and others, most will already have exit strategies. Certainly there are many chief executives who had already given some thought to not having to walk around for too long with egg on their faces; AMP head Craig Meller leaves at the end of 2018 and CommBank’s Ian Narev is handing over to a new boss this month, joining the slew of that bank’s executives who have walked. Across at ANZ, deputy chief executive Graham Hodges and chief risk officer Nigel Williams are also leaving this year. There is no suggestion that these men will be accused of wrong-doing, but no doubt they won’t be the only ones heading for the exit door after the royal commission concludes.

Less common is for a whole board to roll over. But should that be the case? Perhaps the directors should be more accountable for the misconduct. After all, the boards are supposed to be the companies’ ‘culture police’, ensuring those they preside over stay honest and true to rules laid down by the Australian Securities and Investments Commission.

Independent and respected economist Saul Eslake certainly agrees that Commissioner Kenneth Hayne could force bank directors to face his questions.

Mr Eslake told YourLifeChoices: “Ultimately, it is the board that takes responsibility.”

Year in year out, board chairmen write glowing reports of the achievements of their bank chief executives, congratulating them for returning bumper after bumper billion-dollar profits. In light of the royal commission revelations so far, perhaps the powers that be ought to be asking boards and their chairs to ‘please explain’ any link between these profits and the misconduct that they had overlooked.

Do you think bank executives should be jailed if they are found to have flouted the regulations? Have you been charged for financial advice you did not receive?

Join YourLifeChoices today
and get this free eBook!

By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy


Revenue not advice the priority for AMP

Thousands of AMP customers charged for services never delivered.

Questions to ask your financial planner

Ask these questions before you make a decision.

Major banks to be quizzed over ‘failed’ advice

Banking inquiry will probe systematic failures in financial advice divisions.

Written by Olga Galacho


Total Comments: 52
  1. 0

    Yes, people who lie to regulators should face gaol time and fines. I know that those at the top are ultimately responsible for a company but I question whether they should be the ones to suffer sanctions. If they are lied to and there is a cover-up at a level below them and they have made efforts to confirm the erroneous reports, can we really lay full blame at their feet?

    • 0

      Blame the footsoldiers, not the commanders?

    • 0

      Absolutely, time to wake and smell the dissolution.

    • 0

      The buck should stop at the top OM. If a bank CEO has no idea then fair enough but the past 20 years has been DELIBERATE attempts to defraud individuals who are not cashed up enough to take a bank to court. That locks in an instant loss and financial loss for the victim and that is how the crooked system protected by our government works. Better known as a cartel of crooks watching each others’ backs.
      Do not give them golden parachutes and top jobs in other industries. Send the bastards to jail where common criminals belong. No parole!

    • 0

      Even under their new shift to ‘outliers’ instead of ‘in-house’ – I would not let these vultures at the top of the pile in these institutions get away with less responsibility that a principal franchisor has now been deemed to hold – if they stuff up – the franchisor has failed in a duty.

      so if the banks ‘outliers’ similarly fail in their duties – the bank must retain ultimate responsibility.

    • 0

      If a bank CEO has no idea then he/she has failed in his/her first duty.

  2. 0

    These disclosures are the results of a Royal Commission that we did not need Mmmmmm

    • 0

      You mean one the banking/government cartel did not want and tried everything to stop?

    • 0

      Yes, that’s the one.

    • 0

      Yep, I’m one of those who thought it was not needed. Just didn’t realise that all this was going on. 🙁

    • 0

      Quite strange don’t you think that the government did not want this banking royal commission and it was the banks themselves that ended up asking for it? Did they realise that things were so corrupt and unsolvable that something was needed to bring it all to an end? Heads should roll and a lot of them IMO and yes gaol time most definitely.

    • 0

      Seeing as Malcolm Turnbull was once a banker, and strongly came out against a RC into banking makes you wonder about how much he knew, and how much damage the findings would to to him and the Coalition deniers.

  3. 0

    Absolutely jail them ! Every single one of those a’holes who lied to ASIC SHOULD be jailed! Might give the other rats working in the corrupt financial industry food for thought about their own actions.

    • 0

      ASIC must have known about these practices for a long time – the question is WHY DID THEY NOT ACT?

      If they didn’t, they haven’t been doing their job, seeing how quickly the Royal Commission had brought up so many issues with atrocious behaviour and missing governance. Fire ASIC people responsible as well, besides sending perpetrators of these acts within the banks to jail!

    • 0

      ASIC is a toothless tiger which has one prosecution a year to look good. Try to get them to do something about a crooked scam and see what happens. They avoid it and give you BS about who should do something other than them. Pitiful bureaucracy at work.

  4. 0

    OM you sound just like a prime minister I see on tv,They will be able to pay there fines 0n the 65 billion dollar gift that this government is giving the top end of town

  5. 0

    ASIC does not have a great record of successfully prosecuting large corporations, or their executives.
    Any penalties, if indeed any of these people are ever held accountable, are likely to be minimal.

    Really their salaries,assets and termination payments should be frozen and used to repay all those people they have happily defrauded.

    • 0

      ASIC does not want to prosecute, its employees do not want to rock the boat lest they lose their well paid jobs and corporate criminals are mostly protected by the political elite. That is fraud at the top by any other name.

  6. 0

    I think the biggest offenders are the politicians, imagine if they were Investigated , how many would still be there .? Imagine the savings , just a few Bishop , Ley plus labor etc. They should be forced to retire the same as all of us their perks curtailed.

    • 0

      And those who lie to the public to get elected should be jailed for fraud.

    • 0

      Even those who were elected after making false declarations about their citizenship didn’t suffer ANY consequences. I heard it has been decided (not sure by whom – maybe themselves / their mates) that they don’t have to refund the falsely earned salaries & perks!
      With taxpayers also paying for their legal expenses and re-election costs – talk about insulting the taxpayer!

  7. 0

    I would rather politicians that lie to the people face jail time

  8. 0

    The big end of town go to jail WHAT A JOKE,the Libs put their mates in jail I would like to see that.Mal was dead set against any Royal Commission at all.Back to bed O.M.

  9. 0

    Lying, in general, is not against the law except when faced with Royal Commission. However, a jail sentence is more just if the Commission can prove that financial gain was made through deceptive, misleading and negligent conduct. Charging customers fees when no service was provided fits the category of financial gain by deception. Someone in government should be printing up “GoTo Jail” cards and handing them to the banking executives.

  10. 0

    They will just tell the Royal Commission what it wants to know and that will be the end of it.

Load More Comments



continue reading


The top-selling-souvenir from every country in the world

Do you buy souvenirs to remember your overseas holidays? If so, we imagine you have been looking at these very...


ACCC to keep a keen eye on travel issues this year

Australia's consumer watchdog expects to have its hands busy dealing with COVID-affected travel complaints this year. In his annual address...


Cruisers turn to superyachts to satisfy their cruise cravings

Typically, Australia is one of, if not, the biggest cruise market in the world. It wasn't so long ago that...


Tassie's top 5 Airbnbs

Tasmania does Airbnbs a little differently. Firstly, many stays boast perfect - or very nearly perfect - ratings. Secondly, there...


The world's first 'museum of hangovers' has opened in Croatia

The Museum of Hangovers - set up, inevitably, by students - is an homage to pounding headaches, alcoholic antics and...


Australian border closure extended until June

Earlier this week, health minister Greg Hunt confirmed that the "human biosecurity emergency period", which enabled the government to place...


International borders could reopen in June 2021

The Business Council of Australia (BCA) is waving a big stick at state and territory governments, with a plan to...


Five epic Aussie adventures

With international travel on pause, there is no shortage of epic adventures for those lucky enough to be stuck Down...