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Charles Ponzi

Charles Ponzi

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About Me

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    1956-12-19
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    Charles Ponzi sent me.

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  • Charles Ponzi replied to the topic Westpac nosedive in the forum
    Westpac shares crumble after poor lending practices conceded in internal documents
    By business reporter Stephen Letts

    Updated about 4 hours ago
    A pedestrian passes below a Westpac Bank sign
    Photo: The review from PwC was a dismal outcome for Westpac. (Reuters: Will Burgess, file photo)
    Related Story: Banking royal commission grills financial planners, exposes Westpac lending standards
    Related Story: Bank regulator relaxes investor loan 'speed limit', boards made accountable
    Related Story: How the banking royal commission could drag down the entire economy

    Westpac's share price has nosedived after the release of explosive documents detailing widespread failings in not only the quality and riskiness of its home loans, but the way they are processed.
    Key points:

    Westpac shares tumble 4pc after APRA finds it has the worst record of the big banks in the integrity of its home loans
    APRA "Targeted Reviews" find that around 30pc of Westpac and CBA loans did not meet usual verification processes
    Westpac has paid $38m in compensation, while another 64,000 borrowers may require compensation

    An internal memo tabled at the banking royal commission showed Westpac had performed very poorly in a Targeted Review of home loans demanded by the Australian Prudential Regulation Authority.

    "Westpac's performance in the APRA Targeted Review was poor, both absolutely and relatively to our peers," head of portfolio integrity David Watts wrote to his boss George Frazis, the chief executive officer of the consumer banking arm, in a memo last July.

    The review of the home lending practices by accounting giant PwC was commissioned by APRA following consultation meetings with all the banks in early 2017.

    "APRA chairman Mr Wayne Byres noted that Westpac was a significant outlier in our proportion of high LVR [loan-to-value] and IO [interest only] lending," Mr Watts wrote.

    "APRA also questioned the availability of robust data and the effectiveness of analytics and monitoring to appropriately understand the risk profile of all exposures."

    The review from PwC was a dismal outcome for Westpac.

    "The PwC report has disturbed APRA and there is no easy answer to rebuilding trust with them in this area," Mr Watts said.

    APRA has already used the findings of its review to ditch its 10 per cent "speed limit" for investor credit growth in favour of more targeted controls on lending, focusing on the quality of loans and overall household debt.
    UBS slaps a 'sell' on Westpac

    UBS bank analyst Jonathan Mott has crunched the PwC's Westpac report numbers and found:

    29 per cent of minimum income verifications (eg payslip checks) were not completed
    66 per cent had not itemised living expenses collected
    The median assessed household living expenses represented just 23 per cent of household income
    30 per cent of the sample the borrower's financial position was suggested to have been misrepresented
    9 per cent of the sample the loan would not have been approved if the "true financial information" was used in serviceability assessment.

    Mr Mott said the data raised questions regarding the quality of Westpac's $400 billion mortgage book.

    "While Westpac has undertaken significant work to improve its mortgage underwriting standards over the last 12 months, we expect it and the other majors to further sharpen underwriting standards given the royal commission's concerns with responsible lending," he said.

    "Boards and management [are] likely to be much more risk adverse, further tightening of underwriting standards are highly likely across the industry."

    Tighter credit and weaker asset quality left UBS with a very cautious view of Australian banking as investment.

    Westpac's failings in the APRA Targeted Review were enough for UBS to slap a "sell" rating on the bank and scythe its target price from $31 per share to just $26.50.

    Investors took the hint and Westpac shares tumbled almost 4 per cent to a two-year low of $28.13 at 3pm (AEST).
    Contrasting views

    The Westpac memo pointed to contrasting views between the banks and APRA over responsible lending standards.
    Liar loans explained

    The financial services royal commission is expected to devote a lot of attention to "liar loans", but what are they?

    "Poor performance by lenders there may not be showing up in losses now, but, APRA hypothesises, that could change in a material cyclical downturn," Mr Watts wrote.

    "To date most industry thinking about the consequences of responsible lending failures has been centred on the potential for fines, reputation damage and the costs of any remediation necessitated by a breach.

    "It is now clear that thinking needs to broaden."

    Mr Watts warned Mr Frazis of the dangers of not acting quickly to resolve APRA's concerns.

    "APRA is expecting to see improvements made as a matter of urgency and advised they will be working with ASIC [Australian Securities and Investments Commission] on next steps and responses to the industry," he said.

    Failure to respond appropriately could lead a more formal investigation, appointing a third party to manage the bank's affairs and banning executives from senior roles in banking.
    Westpac's exposure unclear

    Mr Watts said the bank's exposure to customers is not clear.
    New home buyers' credit crunch

    Home buyers could see their borrowing capacity cut by as much as 40pc due to reforms likely to be driven by the Hayne Royal Commission

    "If management is correct in its reasoning and there have been few instances of loans having been made to customers who can't afford them, and assuming securities are sound, there should be limited potential for remediation program costs and the underlying principal of loans should be safe," he said.

    "But what if customers who are not stressed now later do become so, not because repayments were always unaffordable, but because they are victims of a general economic downturn, and what if responsible lending breaches at the time of origination in some way impact the integrity of the bank's security from those customers?"

    Mr Watts said in that case, the bank's exposure would be less benign.

    So far the bank has reimbursed customers $38 million to the end of the 2016 financial year, which Mr Watts said was the first time Westpac has been able to track the real costs given the absence of a remediation framework.

    In Westpac's pipeline there are another 22,000 owner-occupier and 42,000 investor loans that may require compensation, the PWC report found.
    CBA has problems too

    A separate APRA Targeted Review of the Commonwealth Bank, also conducted by PwC, found more than a third of the sample — 94 of 271 loans checked — did not meet the bank's verification procedures, mainly due to inadequate documentation.

    Among the adverse findings, the PwC report found borrowers are not required to confirm the details, completeness or accuracy of the information used in their serviceability agreements.

    The report also questioned the CBA's use of the income-adjusted Household Expenditure Measure (HEM) in serviceability assessments.

    "The living expense declarations provided by borrowers are not subject to verification or assessment beyond comparison to HEM," PwC found.

    "This approach does not encourage borrowers to focus efforts on ensuring the completeness and accuracy of their expense estimates."

    Read More...
    7 hours 10 minutes ago
  • Charles Ponzi replied to the topic clawbacks of bonuses: AMP in the forum
    www.smh.com.au/business/banking-and-fina...20180424-p4zbfg.html

    Millions of dollars in bonuses for AMP executives could be clawed back if revelations of misconduct at the royal commission are upheld up by an internal investigation, a leading proxy adviser says.

    The potential for payments to be scrapped or clawed back was raised as investors drove AMP shares to a new five-and-a-half year low, with one analyst saying the business would struggle to recover to the massive hit to its reputation over the last week.
    AMP could claw back millions of dollars in executive bonuses, ISS said.

    AMP could claw back millions of dollars in executive bonuses, ISS said.
    Photo: Ken Irwin

    AMP is reeling after last week it admitted to misleading the corporate watchdog and customers over an over-charging scandal, with the chief executive Craig Meller stepping down on Friday.

    As pressure mounts on the board led by chair Catherine Brenner, on Tuesday proxy firm Institutional Shareholder Services (ISS) gave the company something of a reprieve, recommending investors support AMP's remuneration report at next month's annual meeting.

    In supporting its recommendation, ISS said AMP's board had asserted it had not been aware of "certain conduct issues" when it was setting short-term incentives (STIs) for the year.

    The report said AMP had not yet revealed whether these bonuses would be subject to "clawback" rules or provisions known as "malus," which is a clause in contracts that allows bonuses to be returned when there is poor performance.

    "The whole point of these malus and claw-back provisions is for a situation like this, if proven," said head of Australia and New Zealand Research at ISS, Vas Kollesnikoff.
    Holly Kramer

    Holly Kramer
    Photo: Fiona Morris

    AMP executives were paid more than $11 million in short-term incentives for 2017, and Mr Kollesnikoff said up to 40 per cent of this could be clawed back or cancelled. The ISS report said that AMP representatives had stated that "clawback provisions may be used by the board," depending on the findings of an internal investigation announced last week.

    Commonwealth Bank last year clawed back bonuses paid to previous executives, and cancelled short-term bonuses for its most senior managers, after it was hit by a money laundering compliance scandal.

    AMP's annual general meeting is shaping up as a flashpoint with investors after revelations of misconduct in its financial planning arm have triggered a sharp slump in AMP's share price. On Tuesday it fell a further 2.6 per cent, the eight daily fall in a row, to $4.06, its lowest since August 2012.

    Earlier this week, an adviser to some of the country's largest superannuation funds also threatened to vote against three directors unless AMP's board this week takes further action in response to the scandal.

    ISS recommended shareholders support the re-election of Holly Kramer and Vanessa Wallace, and the election of Andrew Harmos, saying they were all recent additions to the board who were not linked to the past misconduct.

    AMP's financial performance has also been disappointing in recent years, and the recent scandal is raising questions about the future structure of the 160-year old wealth management giant.

    Morningstar analyst David Ellis said the future structure of AMP was "under question" amid the management changes at AMP, the poor performance in some of its divisions, and the damage unleashed by the royal commission.

    "I just cannot see the group, as it is today, remaining like that in the longer term," Mr Ellis said, who has put his rating on the stock under review.

    Mr Ellis said the scandal was likely to further hurt AMP's adviser numbers, its public reputation, and it could could lead to corporate clients ditching the wealth manager. Australia Post was reviewing its default superannuation fund for workers, which is managed by AMP, it was reported on Tuesday.

    "Surely the future of the vertically integrated wealth management business in Australia has got to come under a lot of questions, and that's AMP's bread and butter," Mr Ellis said.

    AMP did not provide further comment on Tuesday.

    Read More...
    13 hours 34 minutes ago
  • Charles Ponzi replied to the topic Jail them: Shareholders in the forum
    Pakula's board and commission knew about US Racketeering laws - its on McGarvie's file LNQ-2015-13099


    Banking royal commission is damaging reputations, but is it enough?
    by business reporter Phillip Lasker

    Updated about 4 hours ago
    Related Story: Financial advice firm impersonated client, royal commission hears
    Related Story: The royal commission changed this week — from awful and dumb to utterly shocking

    It's now clear why the finance sector fought so hard against a banking royal commission.

    Evidence of lies, deceit and fraud just keep on coming at the commission, much of it has occurred under the noses of directors holding some of the country's most prestigious positions.

    The banks' campaign against a royal commission included the predictable threat that customers would eventually foot the bill.

    But what is the cost of a financial sector that has often defrauded its customers and overpaid its executives regardless of the methods used to generate profits?

    Hang the expense of a royal commission and its consequences, Australians will be better off in the long run if its findings are acted on and not politicised.
    Banking probe poorly judged

    The Government's misjudgement on the need for a banking royal commission has come back to bite it, writes Michelle Grattan.

    "One positive from the royal commission is it's occurring before an asset price collapse" says former fund manager Peter Morgan.

    "So financial institutions are in a strong enough position to make the necessary profound changes".

    Last November, Australia's banking leaders caved to the political pressure.

    NAB chairman and former treasury secretary Ken Henry said: "There is something real here for which we have to take responsibility. There are instances of poor conduct, poor treatment of customers and these are matters for which we have to hold ourselves accountable."

    Despite evidence of cover ups and stealing from customers, AMP's board has done the bare minimum, bringing forward the departure of chief executive Craig Meller, and investors are in the dark as to whether he was paid handsomely on his exit.

    Investor groups want wholesale changes to the AMP board including its chairman Catherine Brenner.

    "We think the board needs to take some accountability," said Louise Davidson, CEO of the Australian Council of Superannuation Investors representing Industry Super Funds managing more than $2 trillion in assets.

    "We expect to see some changes at board level which we hope might be announced before next month's AGM."

    Media player: "Space" to play, "M" to mute, "left" and "right" to seek.
    Video: AMP customers charged for financial advice they never received (7.30)

    'We just don't see people going to jail'

    But the fallout could be even more serious for wrongdoers in the financial services sector.

    Some observers see similarities with fraudster Bernie Madoff who stole billions from American investors.

    Nine years ago he was sentenced to 150 years in jail.
    From awful to shocking

    Extraordinary deception. Atrocious behaviour. No concern about consequences. This week's evidence was consequential and now the political environment has shifted, writes Dan Ziffer.

    Like Madoff, Australia's financial institutions have stolen many millions from consumers over many years.

    The Australian Shareholders Association's Judith Fox said "so far what we've seen coming out of the commission it certainly looks like some of the financial services sector have set up parts of their business to be ripping people off".

    To date, accountability at the top has extended to nothing more than undignified departures, bruised reputations and perhaps a pay cut.

    No-one looks close to serving time like Bernie Madoff, Mr Morgan said.

    "The philosophy out there in the marketplace with regard to white collar crime in Australia is the bigger you are the safer you are," he said.

    "There has to be a fright at the bigger end of town that regulators are going to be damn tough."

    Australian Shareholders Association CEO Judith Fox admits that is a problem here.

    "We just don't see people going to jail," she said.

    Read More...
    yesterday
  • Charles Ponzi replied to the topic Global Litigation Funder v AMP Board in the forum
    Will the entire Board of AMP be sued by 3 class actions?

    Slater and Gordon gets backing for potential AMP class action

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    Top AMP advice executive Anthony 'Jack' Regan has acknowledged the financial services giant has a culture problem.
    Top AMP advice executive Anthony 'Jack' Regan has acknowledged the financial services giant has a culture problem. AAP

    by Alice Uribe

    Law firm Slater and Gordon has been backed by global litigation funder Therium for a potential class action against AMP after the wealth giant admitted to cheating customers and lying to the corporate regulator.

    AMP is now staring down three shareholder class actions over damaging information revealed at the royal commission into the financial services sector.

    Law firms Shine Lawyers, Slater and Gordon, and Quinn Emanuel Urquhart and Sullivan have each announced investigations into potential class actions.

    Slater and Gordon said it is investigating potential allegations that AMP breached its continuous disclosure obligations between May 28, 2015 and April 13, 2018, which caused investors who acquired shares during this period to suffer loss.
    AMP chairman Catherine Brenner and the entire AMP board are also in the firing line after admissions that it interfered ...
    AMP chairman Catherine Brenner and the entire AMP board are also in the firing line after admissions that it interfered with a supposedly independent Clayton Utz report provided to the corporate regulator. David Rowe

    Ben Hardwick, Slater and Gordon head of class actions, said the AMP claim had the potential to be one of Australia's biggest investor class actions.

    Read More...
    yesterday
  • Charles Ponzi replied to the topic Howard Bowles' cba bribes case in the forum
    Misleading the Victorian Police Shadow Minister Robert clark, claim customers of Howard Bowles, los angeles business journal confirms the charges. labusinessjournal.com/news/2016/sep/27/a...-case-involving-san/

    Read More...
    yesterday
  • Charles Ponzi replied to the topic Compo for Victims: Shorten in the forum
    View from The Hill: Shorten puts heat on government over bank victim compensation, as Coalition gets better poll news
    April 23, 2018 12.03am AEST
    Author

    Michelle Grattan

    Professorial Fellow, University of Canberra

    Disclosure statement

    Michelle Grattan owns bank shares.
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    O'Dwyer’s effort to avoid any confession of error just drew more attention to the bad call. Mick Tsikas/AAP

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    Sometimes it’s not a bad idea to have a lie-in on Sunday morning. Financial Services Minister Kelly O'Dwyer might wish she’d done so at the weekend.

    O'Dwyer should not have gone out – or been put out - on the ABC’s Insiders program with the lines she had on the banking royal commission. The interview was agony to watch, and counter-productive for the government, as she steadfastly refused to admit the Coalition had been wrong in not agreeing earlier to the inquiry, which has produced such devastating disclosures.

    So often the government seems to take the public for fools. Scott Morrison’s attempts to turn everything to a discussion of Bill Shorten are ludicrous. O'Dwyer’s effort to avoid any confession of error just drew more attention to the bad call.

    Remember O'Dwyer is well-versed in the financial services area. Look at her CV. She was a senior advisor to then-treasurer Peter Costello. Later she worked at the National Australia Bank. She has seen the banking system from inside as well as from her ministerial and advisory roles.

    And yet, because of the government’s “admit nothing” strategy, she visibly struggled at every turn in Sunday’s interview.

    Asked about her 2016 claim that “for the Labor party to propose a royal commission into banks is reckless and ill-conceived”, she could only fall back to the weak defence that “you can obsess and Labor can obsess about these issues. I’m actually obsessed about fixing the problems”. In other words, the government can be political when convenient but if brought to book, that’s just others “obsessing”.

    Labor’s idea of a royal commission had been “a stunt”, she said, but then “there is no question we got it right in establishing the royal commission”. The difference is that the government did it soberly and deliberately, according to O'Dwyer. Grudgingly and belatedly would be a better description.

    The alternative strategy would have been for the government to say, “Yes, in retrospect we did not move quickly enough. We were concerned about shaking confidence in the banking system. We did not appreciate how systemic the problems were. We thought we were doing enough but we weren’t”.

    Everyone knows the government’s hand was forced in the end by rebel Nationals. Conceding it had been wrong would have been humiliating. But by doing so the government would have gone some way to clearing its own decks. That might have given it a fighting chance of being seen as part of the solution rather than having the attention so sharply focused on its abysmal failure.

    Morrison in an interview in AFR Weekend also tried a convoluted avoidance game, as he sought to reconcile being surprised by the royal commission’s revelations with earlier arguing it wouldn’t find issues government didn’t know.

    “When I say they were known to government, they were known to government agencies”, he told the newspaper.

    “There is a difference between individual ministers being aware of particular things and the regulatory agencies being aware of them.”

    Morrison likened his position to that of a police minister not knowing every criminal investigation underway. “I am not aware of every court case and every decision and every practice of every bank in the country any more than anyone else is - indeed than the executives in the banks and they run the things,” he said.

    But the issue was not one of knowing “every practice of every bank”. It was a case of being aware of broad malfeasance - and there was plenty of evidence of that, through parliamentary inquiries and what was being said by victims, financial journalists and government backbenchers such as senator John Williams.

    When politicians are unwilling to take responsibility, that just adds to the distrust and anger voters feel towards them. It’s a sign they are treating the people with disrespect, so is it any wonder they don’t get respect in return?

    This bald-faced refusal to acknowledge their own inconvenient history in part comes from the politicians’ belief that if you just burnish the “spin”, you can get away with saying anything. The idea is that you brainstorm some “lines”, repeat them shamelessly, and hope they will be accepted – regardless of their disconnect from reality.

    It might work for an occasional glitch when life generally is going well for a government and the public are in a good mood. These days, neither condition is present.

    Meanwhile, as the government implausibly denies being out-manoeuvred over the commission, Shorten is pushing ahead again in the banking debate.

    He has released a letter to Turnbull in which he says: “Given the shocking evidence that has been revealed so far, it is time the government gave serious consideration to a compensation scheme for the victims of proven wrongdoing. It’s unacceptable for people to suffer because of the misconduct of others, with no dependable access to justice.”

    It will be a popular pitch out in the electorate, just as Labor’s call for a royal commission was.

    POSTSCRIPT

    The government has received some good news in Monday’s Newspoll in The Australian, with Labor now leading only by a narrow 51-49% in two-party terms. This compares with a 52-48% ALP lead in the poll a fortnight ago, when the Turnbull government passed the 30th consecutive loss landmark. The current poll is the Coalition’s best two-party preferred result since September 2016.

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    yesterday
  • Charles Ponzi replied to the topic Royal Commission necessary: NAB Boss in the forum
    23 April 2018

    SYDNEY, April 23 (Reuters) - Australia's competition watchdog on Monday supported massive increases in financial penalties for companies caught doing the wrong thing, after widespread misconduct was exposed by an ongoing inquiry into the financial sector.

    Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims said the government was correct to propose penalties of up to 10 percent of turnover, potentially running into hundreds of millions of dollars.

    "The penalties we're getting these days on both competition and consumer matters are tens of millions. We need penalties in the hundreds of millions," he told state broadcaster the ABC.

    "The key bit of the penalty is 10 percent of the turnover - that's the change we've got to make in Australia in relation to not only competition but also consumer penalties so that company boards really sit up and take notice ... and don't just treat it as a cost of doing business."

    His comments came after Prime Minister Malcolm Turnbull admitted he had been wrong to oppose the establishment of the independent judicial inquiry into the scandal-ridden financial sector, whose daily revelations of wrongdoing have shocked the country in recent weeks.

    "Politically, all of the commentators are right when they say we would have been right to establish one earlier," Turnbull said during a visit to Germany, according to the ABC.

    The first three weeks of public hearings at the inquiry have been a political embarrassment for the government and a publicity disaster for Australia's major lenders and AMP Ltd , the country's largest listed wealth manager.

    It has heard of strategies to deceive regulators and cases of people suffering financial distress due to poor financial advice, being charged fees for a decade after they had died and deliberately charged fees for no service.

    Sims backed the government's promise last week to double prison terms for corporate crimes to 10 years, dramatically increase financial penalties from A$10 million ($7.7 million) to up to A$210 million or 10 percent revenue, and ramp up the investigative powers of the corporate regulator.

    "I think the banks think of themselves as a protected species," Sims said.

    Australia's major lenders - Commonwealth Bank of Australia , Westpac Banking Corp, Australia and New Zealand Banking Group, and National Australia Bank - control 80 percent of the lending market and along with AMP, also have the lion's share of the financial adviser market.

    But they now face the almost certain prospect of greater regulation, stricter oversight, higher penalties and possible criminal charges.

    "It is now clear to me that the Royal Commission is necessary and justified," NAB's CEO Andrew Thorburn said in a statement on Monday morning, ahead of the bank's own appearance at the inquiry.

    ($1 = 1.3041 Australian dollars) (Reporting by Paulina Duran; Editing by Stephen Coates)

    Read More...
    yesterday
  • Charles Ponzi replied to the topic Howard Bowles' Amex Case in the Scotus in the forum
    U.S. Supreme Court Weighs Amex Rules in Antitrust Enforcement Test
    By David McLaughlin
    27 February 2018, 06:21 GMT+11

    Justices appear divided over steering rules on merchants
    U.S., states say Amex rules harm competition with other cards

    U.S. Supreme Court justices appeared divided over whether rules American Express Co. imposes on merchants violate antitrust laws, in a case that will affect not only the credit-card business but may also limit future enforcement against dominant companies.

    Two of the the court’s liberal members -- Justices Sonia Sotomayor and Elena Kagan -- signaled at arguments Monday that they back the government’s claim that the company’s rules harm competition by preventing retailers from encouraging customers to use lower-cost cards. Merchants can’t offer consumers a choice between earning a discount by using another card or sticking with an American Express card so they can earn rewards, Sotomayor said.

    "You’re not giving me the choice," she said. "And that’s what price competition is about, my choice, not your choice about what’s more valuable to me."

    The case centers on the fees credit-card companies charge to retailers for processing transactions. American Express’s "anti-steering" provisions bar retailers from doing anything like offering discounts to encourage the use of competing cards that are less expensive. As a result, the government says, stores are stuck with higher fees, which are passed on to consumers, even those that don’t use American Express cards.

    The Justice Department’s antitrust division and a group of states sued American Express in 2010, saying the company’s rules thwarted competition from cards that charge lower fees.
    ‘Immunizing’ Tech Platforms

    The outcome of the case could have broader implications for antitrust enforcers. The Open Markets Institute, a Washington organization that researches monopoly power, said in a brief to the justices that a lower court ruling in favor of American Express risks "immunizing" tech companies such as Amazon.com Inc., Google and Facebook Inc. from antitrust scrutiny by making it harder to prove competitive harm.

    The Computer and Communications Industry Association, a technology trade group whose members include Amazon, Google and Facebook, urged the justices to uphold the appeals court ruling in favor of American Express. A reversal could undermine innovation, the group said in a court brief.

    Justice Neil Gorsuch appeared to support American Express’s arguments. He said its rules don’t affect Mastercard Inc. or Visa Inc.’s ability to cut fees or advertise that American Express’s fees are higher.

    "It’s just the difference between Cadillacs and Kias," Gorsuch said. "People can choose" between a high-cost, high-reward card, or a cheaper alternative. "And the two sides can compete with one another," he said.
    Weighing Harm

    American Express says the rules allow it to compete with Visa and Mastercard by offering cardholders different services and benefits. A federal appeals court in Manhattan sided with the company, ruling the government failed to show the steering rules are anticompetitive. The court said enforcers must weigh not just the harm to merchants, but also the benefits to cardholders.

    Critics said imposing that balancing test would lead to perverse outcomes. It would open the door to companies using their power in one market to raise prices and direct the benefits elsewhere, said a group of antitrust law professors who filed a brief with the court. Google, for example, could impose a restraint on musicians selling music in the Google Play store and defend it as allowing the company to earn higher profits that can be used to sell phones more cheaply, they said.

    "It is important that lower courts not confuse mere ‘lower prices’ somewhere in the economy with a ‘procompetitive effect,’" the professors said. "In important respects, the reality can be the exact opposite."

    The case is Ohio v. American Express, 16-1454.

    Read More...
    2 days ago
  • Apr 18 2018 at 11:00 PM
    Updated Apr 19 2018 at 10:31 AM

    My Saved Articles Print License article

    Clayton Utz complicit in AMP misleading ASIC

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    Clayton Utz has come under fire for making substantial changes to its "independent report" at AMP's request.
    Clayton Utz has come under fire for making substantial changes to its "independent report" at AMP's request.

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    by Misa Han

    Top law firm Clayton Utz has come under fire for being complicit in AMP misleading the corporate regulator.

    Clayton Utz rewrote a report on "fees for no service" scandal 24 times at the request of AMP, to remove damning references from the report, Tuesday's banking royal commission hearing revealed.

    The report was then presented to Australian Securities and Investments Commission as "independent".

    Thomas Clarke, a corporate governance expert at UTS Business School, said AMP's conduct in making many amendments to the report and submitting it to ASIC as an independent report was "at best deceptive and possibly fraudulent".
    1 Blight Street, Sydney, the head office of law firm Clayton Utz which rewrote a report on "fees for no service" scandal ...
    1 Blight Street, Sydney, the head office of law firm Clayton Utz which rewrote a report on "fees for no service" scandal 24 times at the request of AMP. Lee Besford
    'It doesn't get more serious'

    He said Clayton Utz also helped AMP mislead the corporate regulator.

    "Unless at some stage they have withdrawn their claim to ASIC it was an independent report, they were complicit," he said.

    He said while historically, consultants, audit firms and law firms have always been criticised for being too influenced by very generous consulting fees on offer, this instance stands out because the report was destined for a regulator.

    "It doesn't get more serious in terms of questioning the professional integrity of both the law firm itself and AMP," he said.
    'Proactive management of words'

    Sydney Law School professor David Kinley said it was "rich" for AMP to call the report independent and AMP sought to mislead ASIC by presenting it as an independent report.

    "If this was to be presented by AMP to ASIC as an independent report then both AMP and Clayton Utz have an obligation to ensure that it is worthy of that name," he said.

    He said evidence from Tuesday's hearing seems to indicate there was a "very proactive management of the precise words" that were being used in the Clayton Utz report.

    A managing partner at a commercial law firm, who declined to be named, said the Clayton Utz report was not a normal practice for a law firm.

    "There is no way whatsoever that the report should have been labelled 'independent', because it clearly wasn't," he said.

    He said while it was not uncommon for external lawyers to amend a report at the client's instructions, they should not have agreed to be identified as operating as independently.
    Reminder

    The corporate regulator's regulatory guide, which applies to M&A transactions but may provide guidance on experts writing independent reports, states "if a commissioning party or an adviser disagrees with the expert's analysis in a draft of the expert report, the report should only be altered if the expert is persuaded that all or part of the expert's assessment is based on an error of fact".

    Commenting on the AMP scandal, ASIC reminded all financial institutions of the importance of co-operating with the regulator.

    "Making false or misleading statements to ASIC can result in civil and criminal sanctions," ASIC said in a statement.

    Clayton Utz declined to respond to eight questions put by The Australian Financial Review, including a question on whether the law firm will investigate the allegations in light of the royal commission.
    "Independent FOS, "Independent Legal Board" "Independent ASIC" .... then presto, everyone wants ASIC's Pandora's Box opened. :


    A spokeswoman said it won't comment on matters before the commission.

    Clayton Utz is one of Australia's most prestigious law firms whose alumnus include Attorney-General Christian Porter, Foreign Affairs Minister Julie Bishop and former prime minister John Howard. None of these people worked on the report for AMP.

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    2 days ago
  • Charles Ponzi replied to the topic Spying on Royal Commission Advocates? in the forum
    Shirley Joseph is named in the Whistleblowers reports.

    ACCC plan for fines worth hundreds of millions of dollars

    The Australian 12:00am April 23, 2018

    Richard Gluyas



    The competition watchdog is set to spearhead a public campaign for “massively” higher penalties to deter corporate wrongdoing, particularly for misconduct and egregious behaviour in the financial services sector.

    ACCC chairman Rod Sims, who received funding in last year’s budget for a permanent team to investigate competition in the ­financial system, flagged that part of the campaign would be court submissions for penalties in the hundreds of millions of dollars in a group of cases now at an advanced stage of investigation.

    The Australian Competition & Consumer Commission chief said he was concerned by last week’s reports in the financial services royal commission’s second round of hearings on the $4.6 billion-a-year financial advice industry.

    However, it was an attempt by current and former bankers to ­deflect the blame for misconduct to pressure by investors to ­increase profits that set him thinking about the best way to rebalance the risk equation. “We need to have massively higher penalties — 10-15 times higher than they are — that grab the attention of company boards and senior management so penalties are no longer merely seen as a cost of doing business,” he told The Australian.

    “By the banks’ own admissions, incentives matter here. It’s clear to me the banks are saying we have to do these (bad or illegal) things because the financial consequences of not doing them are too high, and that means the penalties are not large enough to ensure the focus is on real competition for the benefit of the customer.”

    Last Thursday, after the royal commission heard evidence that the finance sector had charged fees to dead people and AMP had misled ASIC 20 times, Treasurer Scott Morrison announced companies could face maximum fines of $210 million or be stripped of 10 per cent of their turnover.

    The reforms would be part of a new civil and criminal penalties regime under the Corporations Act administered by the consumer regulator, the Australian ­Securities & Investments Commission.

    The penalties regime for the Competition and Consumer Act, administered by the ACCC, was updated in 2007, with the new framework also enabling fines of up to 10 per cent of turnover.

    However, to invoke the higher penalties, the misconduct has to occur post-2007, and there are also technical legal hurdles that have to be cleared.

    In November 2007, the ACCC secured a $36m penalty against the late Richard Pratt’s Visy group for price fixing in the cardboard box industry. While this was a ­record, an equivalent settlement for cartel behaviour in Europe or the US would have been many multiples of that figure — in the hundreds of millions of dollars.

    A report last month by the OECD found average Australian penalties are significantly lower than comparable jurisdictions, ­especially for large firms or for longstanding anti-competitive behaviour. Based on a sample of ­cartel cases, the report found penalties would have to be increased 12.6 times to match the average penalty in OECD countries.

    Even the judge in the 2014 unconscionable conduct case brought by the ACCC against Coles over its dealings with suppliers complained that the available penalties were too light.

    The biggest challenge, Mr Sims said, was to change the mindset of the courts and the legal profession so the concept of a much more punitive penalty regime was ­accepted, Mr Sims said.

    “The law is about precedent, and the penalties which have formed the precedent were often imposed at a time when the maximum penalty was $10m per breach,” he said. “So we have to have a huge change in mindset.”

    Part of that change would occur as a result of current cases under investigation by the ACCC. Mr Sims said some of those investigations are at an “advanced” stage. If court proceedings were filed and the ACCC emerged ­victorious, it would then be in a position to make submissions on an appropriate penalty in the hundreds of millions of dollars, instead of tens of millions of dollars.

    “I’d like to think we’re not too far away from doing that,” Mr Sims said. “I believe we’re close to turning the corner and we’ll see penalties in the hundreds of millions of dollars.”

    While the ACCC boss declined to name the bankers who had prompted his determination to change the mindset on penalties, former National Australia Bank chairman Michael Chaney said earlier this month that a trade-off between behaviour and profits had led to governance breakdowns.

    Mr Chaney said if a chief executive had been “constrained” as ­recently as five to eight years ago because they were unsure about the products they were selling, there would have been no growth in earnings or even a reversal.

    Mr Sims said he often heard corporate leaders complain about market pressure to grow profits. “It doesn’t surprise me when they say inappropriate behaviour is sometimes necessary otherwise the share price may fall,’’ he said.

    Read More...
    2 days ago
  • The leading Australian law firm embroiled in AMP’s “fees for no service” scandal – the banking royal commission’s biggest bombshell so far – has already won nearly $11 million in government contracts since January.

    Amid calls for Clayton Utz to be suspended from all government work, analysis by The New Daily shows the law firm is well on the way to taking in tens of millions of dollars from the taxpayer this year.

    Since the start of the year, based on contracts made public, Clayton Utz won 95 tenders worth a total of $10.96 million to provide legal services to various departments and agencies.

    The royal commission heard evidence last week that Clayton Utz rewrote a report on AMP’s “fees for no service” scandal 24 times at the financial services company’s request.

    The report was given to corporate regulator ASIC and described as “external and independent”.

    While most of the public outrage has been directed at AMP, prompting CEO Craig Meller to bring forward his retirement, Clayton Utz has also come under fire for its role in the scandal. It denied any wrongdoing in a statement on Sunday night.

    But the revelations were enough for former Victorian Liberal premier Jeff Kennett to demand the law firm be “removed and suspended from all government work”.

    “Culture will not change until those responsible are truly penalised and shamed,” he said.

    It comes as evidence emerging from the royal commission puts pressure on the Turnbull government to admit it was wrong to block the inquiry for nearly 18 months.

    Financial Services Minister Kelly O’Dwyer refused to admit fault when asked 10 times whether she had been wrong to oppose the royal commission in a tense television interview on Sunday.

    The contracts won by Clayton Utz are worth less than those handed to the big four accounting and consultancy firms KPMG, Deloitte, Ernst & Young and PwC.

    Those four firms won about $420.3 million in government work in the 2015-16 financial year, according to Fairfax Media, with KPMG handed 447 contracts worth $158.9 million in total.

    The increased spending on consultants coincides with large political donations from those firms to the major parties.

    A report in The Australian Financial Review earlier this month listed Clayton Utz among dozens of law firms recruited by the government in a trial to outsource the drafting of legislation.

    As of March 13, the day of the first hearings at the royal commission, Clayton Utz had won 28 government contracts worth more than $1.2 million, according to the AusTender website.

    In an awkward coincidence, on April 17, the same day Clayton Utz’s involvement in the AMP scandal was revealed at the commission, three contracts won by the firm worth more than $60,000 were published on AusTender.

    The work is spread across a range of government departments, including Defence, Finance, Home Affairs, Jobs and Small Business Social Services, as well as the Australian Electoral Commission and Australian Federal Police.

    But Clayton Utz’s biggest government client by far has been Defence, which has handed the company $9 million for legal work, including a $4.7 million, 10-month contract made public on January 18.

    The Australian Taxation Office will shell out $250,000 to the law firm for legal services for a contract (November 2017-December 2018) made public on February 27.

    A February 20 contract shows the Director of National Parks will pay the law firm $450,000 for company’s services over 12 months.

    The law firm also won a $30,000 contract to provide training services to the Australian Federal Police.

    In 2015, two years before it provided the report on AMP to ASIC, the corporate regulator paid $55,000 to Clayton Utz for “personnel recruitment” services.

    Clayton Utz chief executive partner Rob Cutler said in a statement on Sunday night: “Clayton Utz rejects any suggestion that the independence of its investigation and report findings to the AMP Board into AMP’s Advice business was in any way compromised.

    “The terms of engagement stipulated that the investigation was to be undertaken independent of management of the Advice business being reviewed and under the instruction of the AMP Board and its General Counsel.

    “Clayton Utz notes that AMP may be addressing the commission further and it would be inappropriate for us to make any further comment at this time.

    Read More...
    2 days ago
  • Charles Ponzi replied to the topic Jeannie Pakula's file Com-2015-038/041 in the forum
    www.afr.com/business/banking-and-finance...2019-20180415-h0ysjv

    by Misa Han

    Former Commonwealth Bank IT general manager Jon Waldron is expected to face a six week trial in 2019 on bribery and corruption charges.

    At a brief directions hearing on Friday, the NSW District Court set a trial date beginning from January 21, 2019.

    An arraignment is scheduled on July 20 when he will plead guilty or not guilty.

    Mr Waldron was facing seven charges of corruptly receiving a benefit of more than $15,000. He was also charged with obtaining financial gain through deception. He has previously pleaded not guilty.

    Earlier this month, and after eight days of committal hearing, magistrate Hugh Donnelly of the NSW Local Court found there was sufficient evidence to proceed to trial by jury on all counts.

    The prosecution's case was that Mr Waldron, who was CBA's IT general manager at the time, and the bank's executive general manager who cannot be named for legal reasons, used CBA funds to purchase $10.5 million worth of software called McAfee and Pivotal from US-based software company ServiceMesh.

    Both software products were allegedly unnecessary for the bank.

    The court also heard that Mr Waldron and his colleague allegedly split the $10.5 million payment from the bank to ServiceMesh into smaller transactions of less than $1 million each, so that it could be signed off by the executive general manager and bypass the ordinary processes at CBA, including approval by the then chief executive.

    Mr Waldron in turn received cash kickbacks from ServiceMesh, the prosecution alleged.

    Separately earlier this month, events management company Human Group in North Sydney, an accountant and the residence of Human Group founder and director Helen Rosamond in Potts Point were raided by NSW police to investigate an alleged scam involving overcharging and kickbacks.

    Read More...
    3 days ago
  • Charles Ponzi replied to the topic Investigate them in the forum
    Malcolm Turnbull and Scott Morrison had to be dragged kicking and screaming to set up a royal commission into banks and the finance industry. They defended their position by claiming there were significant mechanisms already in place to protect the public. Given the scale of the scandal that is being exposed, I challenge the country's two highest office holders to explain their initial reluctance. If their judgment was so very poor in this instance (like the banks'), how can they be trusted?
    Illustration: Andrew Dyson

    Illustration: Andrew Dyson

    Jacqui Holston, Balwyn North
    Next, a slap on the wrist, then business as normal

    It seems that executives of financial institutions have encouraged their staff to systematically rob their clients; the institutions benefit and the staff get bonuses, but hundreds of thousands of customers face financial loss and stress. Perhaps a few heads will roll but the old boys/girls networks will ensure nothing too drastic happens because it is only "white collar crime". Meanwhile, many thousands of people are being jailed for victimless crimes, some as insignificant as not having the money to pay parking fines or toll costs. Australia, a fair go for all? You must be joking.

    Meg Paul, Camberwell
    Bankers are out of touch with their clients' world

    Stephen Batholomeusz asks, "Why do people park their ethics in the driveway as they go to work?" (Business, 20/4). Realistically, those who are found guilty by the commission would never park in their driveways. Instead, they travel from their upper-class homes, out of their garages and straight into the garages of their opulent offices. In doing so, they lose connection, understanding and empathy with their customers. Perhaps increasing corporate volunteering, so that these people better connect with the community, would be a good start in driving better behaviour. That and forcing them to take public transport.

    Ash Rosshandler, Elsternwick
    Many winners, few winners, from deregulation

    As always, this time in the finance industry, deregulation is shown to work perfectly, as designed: that is, designed by those who want to be deregulated, and those whom they pay to advocate for deregulation.

    Dave Bath, Armadale
    It's time to get tough on corporate misbehaviour

    With the revelations coming out of the royal commission, and the latest scandal to affect the live animal export trade, it is no wonder our confidence in business and government systems continues to wane. The "umbrella" organisations argue that they should monitor the behaviour of their constituent businesses, while at the same time many businesses demonstrate that shameful, exploitative financial self-interest is their prime motivation. Governments respond ineffectively to these scandals, thereby placing the interests of business and industry above the interests of the community.

    The behaviour of businesses should be monitored by well-resourced, independent umpires, and the directors and owners of businesses that misbehave should be penalised.

    Sean O'Sullivan, Healesville
    Why were whistleblowers ignored for so long?

    Malcolm Turnbull and Scott Morrison must have thought we were all stupid when they played down the need for a royal commission. Now that the banks' heinous scheme to fleece their customers have been revealed, the Prime Minister and Treasurer are puffing their chests out and threatening 10-year jail terms. Whistleblowers have been blowing their whistles for 10 years, while the government remained unconcerned. The commission is forcing them to act like they care. They are no better than the bank bandits.

    Debb Schmetzer, W Tree
    Hit guilty bankers and executives where it hurts

    Don't throw convicted bankers into prison. They have cost us enough money already. Instead, confiscate their passports, fine them huge amounts, and sentence them to home detention and onerous community service.

    Raeleene Gregory, Ballarat East
    THE FORUM
    The forgotten 'literacy'

    The most revealing aspect of the royal commission is not the failings of the banks in particular and the financial sector in general, as well as the regulators, but the ignorance, gullibility and financial illiteracy of people who partake in this industry. Undoubtedly we will see profound changes to it in the future. Hopefully this will include financial literacy education for the consumer.

    Margit Alm, Eltham
    Pull the other leg

    Scott Morrison wants us to believe the Coalition's proposed changes to penalties for corporate misbehaviour are the result of "a long period of work". So it is pure coincidence that he made this announcement at the end of the week of hearings which have exposed financial institutions' shonky behaviour? What cynical rubbish.

    Ross Crawford, Frankston
    A clean sweep needed

    The banking sector and live animal export trade have a lot in common, including a lack of integrity. Regulation without scrutiny and enforcement have left a lot of financial and organic muck between the paddock and the plate. Who benefits? Who suffers? How robust and transparent will the clean-up of both systems be? It could never be acceptable to establish yet another rotten system.

    Sue Hill, Neerim South
    Taking responsibility

    With local recycling having reached crisis point, it is time we added the word "refuse" to the expression, "reduce, reuse, recycle". We should refuse to purchase anything that come with excessive packaging. There is no need for fruit and vegetables to be presented on polystyrene trays and wrapped in plastic. Reusable coffee cups are relatively inexpensive, and can easily replace polystyrene or cardboard cups. Many cafes are delighted to refill a "keeper". Whilst most us are reliant on our local council for the final disposal of our waste, it is surely up to us to take responsibility for the amount we create.

    Jo Bond, South Melbourne
    Our MPs' lack of vision

    In a prosperous and supposedly "developed" country, it is a travesty that much of our recycling will soon be heading into landfill. It is another example of political inaction. We need politicians with a long-term vision, not just a desire for short-term profits.

    Matt Mackay, Melbourne
    Come clean on all deals

    Given the needless trashing of the Country Fire Authority, should there not be an official investigation of the claimed "deal" between Daniel Andrews and the United Firefighters Union (The Age, 19/4)? It may have been a corrupting element on our already dodgy democracy. And, Premier, what other expensive "deals" have blown Victoria off course?

    David Bishop, East Brighton
    A lesson in respect

    Most local governments run free seminars on volunteer management, respect and reward training. Daniel Andrews should have enrolled in one three years ago. If he had, all would be well with the firies now.

    Brian Girling, Mulgrave
    User-friendly transport

    Scott Morrison says that "people studying, people visiting" are the reason for our crowded public transport (The Age, 18/4). Would he like to ban them from using it? Another solution would be to run more frequent trains and trams, and more connecting buses to railway stations. In the outer suburbs particularly, and even regional towns, additional parking at stations and more frequent services are badly needed. The new, large housing estates could benefit from mini-buses constantly circulating, at least during peak periods, with stops at stations, schools, kindergartens and shopping strips. It would then be possible for more families to exist with only one car.

    Liz Middleton,Clematis
    Our city's harsh reality

    I dreamt I fell asleep on the No.59 tram and when I awoke, we were passing new housing estates on the fringes of Melbourne. The tracks ended in a paddock, pegged out for subdivision. Great, I thought, public transport is keeping pace with the urban sprawl.

    Then I realised it was a nightmare. There were once market gardens, vineyards and orchards here. This was rich arable land that was about to be buried beneath concrete and bitumen. We were crazy to destroy it. What sane society compromises its ability to feed itself securely and economically? We are mad, the developers are venal and the government is irresponsible.

    Vincent O'Donnell, Ascot Vale
    Gains of infrastructure

    What world is Peter Martin living in when he says no more infrastructure should be built on the basis that it is a net cost (Comment, 19/4)? Infrastructure produces returns indirectly through increases in productivity, not to mention a public commons. I regularly wait in a passing siding on the V/Line commute from Melbourne to Ballarat. Surely a duplicated line would be beneficial. The real issue is the pork barrelling of infrastructure in marginal seats when really there are higher-priority projects in safer seats.

    William Bennett, Ballarat
    Our country's shame

    How sad it was to hear Philippine President Rodrigo Duterte refer to Australia's refugee policy as responding to those who are "hungry and dying" by turning them back to sea (World, 20/4). That a man who appears to have little morality is able to be critical of our policy should cause us deep shame. Not only do we turn those hungry and dying refugees back to sea, we keep those who survive the trip in offshore detention. It does not matter how the government distorts the facts, those refugees, who include children and their families, on Manus and Nauru are just as much prisoners as were the convicts on the First Fleet. It is time to end this shame. Either take up New Zealand's offer to resettle these refugees or bring them here and allow them to recover from the trauma we have caused.

    Marg D'Arcy, Kew East
    Ease off on immigration

    Australians are told that we must sustain high immigration numbers in order to achieve better economic growth. In China, population growth in 2016 was 0.5per cent, while gross domestic product growth in 2018 is predicted to decline to 6.5per cent. (This is still higher than Australia.)

    Why is China able to have strong economic growth with a low population increase, when Australia cannot? Apart from that, why bring so many people into Australia, most of whom settle in Sydney or Melbourne, where the infrastructure cannot cope with the current population, let alone the predicted future levels. High immigration must stop at some point, so why not now?

    John Christiansen, St Kilda
    A reasoned discussion

    Immigration has brought great cultural, social, and economic benefits, but we cannot have a human Ponzi scheme in which the population increases indefinitely. Eventually it must reach an optimum level beyond which disadvantages exceed benefits. The hard part for government is determining that level, which requires reasoned discussion instead of unfounded assertions that immigration per se is either good or bad.

    Richard White, Blackburn
    Changing young lives

    I have met young people whose lives have been transformed by the Duke of Edinburgh Awards, which have been received by 775,000 Australians over almost 60 years. To disparage Prince Philip (Letters, 20/4) is to deny due credit for an immensely successful mentoring program that equips young people with vital skills and wide-ranging developmental opportunities, preventing many from falling through the cracks. It is an especially important contribution at this time of crises engulfing many young lives.

    Barbara Chapman, Hawthorn
    Our badges of rank

    Will someone please remind Bill Shorten (Comment, 19/4) – and Malcolm Turnbull – that John Monash was an Australian general. He wore Australian badges of rank, not American stars.

    Albert Riley, Mornington
    AND ANOTHER THING
    Royal commission

    The Coalition was against a royal commission, now Morrison talks about jail time. The commission should be extended.

    Lorna Jensen, Bairnsdale

    CBA has been charging fees to deceased people. Dead or alive, its customer service is about the same.

    John Page, Glenroy

    What are the chances we'll see institutional re-branding via new logos instead of real change?

    Tim Freer, Torquay

    Now who's naive? The Greens' push for a royal commission and a people's bank is the thoughtful discussion we need.

    Ann Birrell, St Kilda West

    Modern day grave robbers.

    Chris Burgess, Port Melbourne

    Joyce says banks need to do a lot of work to rebuild trust with the community. That's rich, coming from him.

    George Greenberg, Malvern

    Thumbs up to The Age for AMP-lifying misconduct. Thumbs down to MPs who tried to silence criticism.

    Liz Jovanovic, Moonee Ponds

    Communicating with the dead. Which bank?

    Kevan Porter, Alphington

    Fake advice and fake fees for fake customers. We're living in a virtual reality.

    Joan Segrave, Healesville

    Exemplary jail sentences for CEOs would put an end to white collar crime.

    Tony Haydon, Mentone

    If I rob a bank, I'll go to jail.

    Bruce Dudon, Woodend
    Furthermore

    Taxpayers, via the state government, pay firefighters, not Peter Marshall. He who pays the piper ...

    Stephen Baldwin, Frankston

    Israel Folau chose one statement from the Bible. What are his views on slavery, women and animals with cloven feet?

    Julie Carrick, Leopold

    I'm gunning for Rebel Wilson. She said she'd give the money to charity. Needy souls will be pleased at her selflessness.

    Angus McLeod, Cremorne

    When will the government stop the boats that carry our animals on such inhumane journeys?

    Annie Wilson, Inverloch

    Read More...
    3 days ago
  • Charles Ponzi replied to the topic bank directors responsible too in the forum
    Bank boards also responsible: Scott Morrison
    Former AMP Ceo Craig Meller and chairman Catherine Brenner. Picture: John Feder.
    Former AMP Ceo Craig Meller and chairman Catherine Brenner. Picture: John Feder.

    The Australian
    10:01AM April 20, 2018
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    Ben Butler
    Business Reporter
    Melbourne
    Rhian Deutrom
    Reporter
    Sydney
    @Rhi_lani

    Treasurer Scott Morrison has refused to apologise for rubbishing the idea of a royal commission into the banks that he now acknowledges has produced evidence of “abhorrent” behaviour in the sector.

    Launching a package of tougher penalties for corporate wrongdoing alongside Financial Services Minister Kelly O’Dwyer this morning, Mr Morrison also put company boards on notice that they were ultimately responsible for corporate culture.

    “Let’s not forget, it’s not just chief executives here,”Mr Morrison said.

    “Boards, at the end of the day, are responsible for these organisations, and there will be a lot of focus on executives, where executives haven’t been able to deliver here,” he said.

    “At the end of the day, the boards of these organisations are the custodians, really, of the governance, and I am sure that that will have plenty of attention, as the commission carries on its important work.”

    read more
    Durie: Brenner’s head next to rollJohn Durie
    ‘Cash before customers’Ben Butler
    AMP sorry as Meller steps downMichael Roddan, Ben Butler

    He denied that the government’s decision to reveal this morning its response to a Treasury review of penalties for corporate wrongdoing that was completed in November was a knee jerk reaction to the royal commission’s revelations.

    “What we’ve been doing goes to getting the job done,” Mr Morrison said.

    He said that apart from calling for the commision, opposition leader Bill Shorten had not “put one suggestion forward how to improve the system”.

    Ms O’Dwyer said Mr Shorten was in government during a string of scandals including Storm Financial, Trio and Great Southern.

    “We are cleaning up the system that Bill Shorten ignored,” she said.

    Mr Morrison said the resignation this morning of AMP boss Craig Meller following revelations the financial group misled the Australian Securities and Investments Commission 20 times “doesn’t surprise me”.

    “It’s not just the chief executive level - boards at the end of the day are responsible for these organisations,” he said.

    They were “custodians of the governance” of companies, he said.

    The royal commission has heard evidence that institutions both creating and selling financial products creates a conflict of interest, prompting calls for the banks to be broken up by divesting their financial planning arms.

    Mr Morrison stopped short of endorsing the idea.

    “I think you are already seeing some of these institutions make this commercial decision,” he said.

    Supporting the government’s tougher penalties, Australian Banking Association CEO Anna Bligh said the royal commission hearings had been “sobering” for the industry and the issues raised “unacceptable”.

    “The industry has supported the strengthening of the penalties regime for misconduct since the federal government announced its review 18 months ago, as an outcome of the Financial Services Inquiry,” she said in a statement.

    Ms Bligh said before today’s announcement, banks had already put in place rigorous background checks to stop bank staff with a history of misconduct moving from one institution to another.

    “Many of the issues raised over the last few days are the subject of investigation with changes already underway in the sector to ensure cases such as these cannot reoccur.

    “The industry expects that further changes should and will be made following the final recommendations of the commission.”

    Government ‘ran protection racket for banks’

    Earlier, Labor frontbencher Anthony Albanese accused the government of running a protection racket for the banks, voting against a royal commission “on more than 20 occasions” before it was finally cleared to run this year.

    Mr Albanese said the government refused to consider an inquiry “Even when members of their own back bench were crying out for this Royal Commission.”

    “They were describing it as a stunt, as reckless, as something that wouldn’t achieve anything, as just populous nonsense, according to Scott Morrison and Malcolm Turnbull, and, indeed, Kelly O’Dwyer,” he said.

    “What we are seeing now is the evidence out there for all to see, and good policy comes from the evidence”.

    He said the royal commission had begun to expose the tip of the iceberg of the banking sector’s misconduct.

    “What we have heard is senior executives ‘fessing up to what is extraordinary rip offs of ordinary Australians and their savings,” he said.

    “We haven’t heard yet from many of the victims of these practices”.

    Cabinet Minister Christopher Pyne said the evidence the royal commission has heard already was extremely disturbing but the government will “wait for those recommendations before we act hastily”.

    “We are seeing a lot of evidence being presented in the Royal Commission which is very disturbing, and that’s why the Government is taking action to strengthen ASIC’s powers even more than we already have,” he said on the Today Show.

    “We have already given ASIC $100 million more money to pursue bad practices and we are changing the laws to give them the power that they need to be able to pursue bad banking practices”.

    Read More...
    4 days ago
  • Charles Ponzi replied to the topic Are lsbc lawyers immune from ethics in the forum
    The Duties of Lawyers in NSW

    By Sydney Criminal Lawyers | 03/01/2018 | No Comments
    Print

    By Paul Gregoire and Ugur Nedim

    The Legal Profession Uniform Law (Uniform Law) came into effect in both NSW and Victoria on 1 July 2015. It provides the legal framework for the administration of the merged legal systems across the neighbouring states.

    The market for legal services across the two states accounts for 70 percent of the nation’s legal professionals.

    The Uniform Law established two bodies: the five member Legal Services Council and the Office of the Commissioner for Uniform Legal Services Regulation. The council sets out the rules and policies that underpin the Uniform Law, while the commissioner oversees dispute resolution.

    Under the Uniform Law, the Legal Profession Uniform Law Application Regulation 2015 provides the practicalities of applying the legal framework, while the Legal Profession Uniform General Rules 2015 outlines the rules that govern the legal system as a whole.

    And enacted on the same day as the Uniform Law, the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (Conduct Rules) outlines the responsibilities and duties of NSW solicitors, including those relating to relations with clients and other lawyers.

    A solicitor’s obligations

    Solicitors in Sydney, and indeed, right across the state of NSW, are bound by a set of duties once they take their oath and sign the roll of Australian lawyers. Rule 3 of the Conduct Rules states that a solicitor’s paramount duty is to the court and the administration of justice.

    Rule 4 provides a list of other duties that fall upon a solicitor. These include acting in a client’s best interests, being honest and courteous during practice, delivering competent and diligent legal services, and “avoiding compromise to their integrity and professional independence.”

    Solicitors are prohibited from engaging in conduct which suggests they are “not a fit and proper person to practice law” throughout all aspects of their life – not just during their working hours.

    Solicitors are also required to ensure they honour all undertakings to perform legal work for clients and perform that work in a timely manner.

    Client relations

    The client/solicitor relationship is one of the most fundamental of our legal system.

    It is classified as a fiduciary duty, where clients places their “confidence, good faith, reliance and trust” in the hands of their lawyer.

    Confidentiality is key to this relationship. A solicitor must ensure that any conversations, correspondences and documentation that involve a client be kept confidential between the two parties, and only revealed to others in limited situations.

    Before a solicitor begins working for a client, they must disclose in writing how much they will charge, along with other expenses. Known as cost disclosure, this practice should be followed up with regular invoices that outline what services the client is being billed for, and the charge for each of those services.

    Trust

    A solicitor must not allow their own interests, or those of others they associate with, conflict with the interests of their client. In most circumstances, a solicitor should not represent an individual who is in a dispute with one of their current or former clients, as this could create a conflict of interest.

    The specifics of the client/solicitor relationship must be transparent at all times. A client should receive regular written updates about the progress of their cases. And a solicitor must provide advice about all practical courses of action.

    Lawyers must also take the time to explain the law and legal processes to their client. Solicitor must always follow their clients’ instructions, and do so in a timely manner, and in compliance with the law. This means it is improper to act upon directions from a client’s family member or friend, rather than from the client him or herself, unless certain exceptional circumstances are involved.

    Duties to others

    The Conduct Rules also outline the duties solicitors have to other people. These include not taking advantage of another lawyer or other person in order to benefit their client if the act has no “supportable foundation in law or fact.”

    A solicitor who becomes aware that any disclosed materials are confidential, and therefore should not have been supplied to them, should notify the opposing lawyer or other person involved immediately. The materials should be returned or destroyed.

    Lawyers must also refrain from making allegations of unsatisfactory professional conduct or misconduct against another Australian legal practitioner, unless they have sufficient material to establish the claim against that particular lawyer.

    Fit and proper conduct

    Contact with another solicitor’s client or clients is forbidden for NSW solicitors, unless a prior arrangement has been made with the other lawyer, or the solicitor reasonably believes there is a level of urgency that warrants the contact.

    Whilst representing their client, a solicitor must not act or communicate to an extent that exceeds the rights of the client, or misleads or intimidates other people. Nor should they threaten criminal proceedings against another person if a civil liberty of their client’s is not satisfied.

    In promoting their practice, a NSW solicitor must not seek instructions for the provision of legal services in a manner that harasses another person, who due to a recent trauma or injury might be at a disadvantage by dealing with the solicitor at the time the instructions were sought.

    And if a solicitor engages with a third party on behalf of their client, but is not intending to pay them personally, the solicitor must advise that party in advance. This may apply to medical practitioners or other experts that are engaged to prepare reports and the like.

    Ongoing training

    All NSW solicitors are required to hold a current practising certificate in order to practise law. The certificate acts a formal agreement to abide by the profession’s rules and codes of conduct, and must be renewed annually.

    As part of the requirements for a practising certificate, a solicitor must commit to mandatory continuing professional development training, which ensures they stay abreast of developments in ethical and professional responsibilities, as well as professional skills and of course the law.

    ‘Accredited Specialist lawyers’ are required to undertake a greater number of hours of yearly legal training than other solicitors. These lawyers are certified by the Law Society of NSW as experts in their field of law. Areas of specialist accreditation include criminal law, family law and personal injury law.

    These rules and regulations are designed to ensure that when members of the general public come to the point where they need to engage with a NSW solicitor, they can do so with trust, and without fear of having their confidentiality breached.

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    6 days ago

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