Menu
Cuzz Media

Cuzz Media

Cuzz Media is part of t...

NAB VICTIM

NAB VICTIM

In late 2008 we became vi...

Banking In Australia Today

Banking In Australia Today

Visit Banking in Austra...

Donate Please

Donate Please

We need your support. ...

Prev Next

Members Login

Get Connected!

  • Connect and expand your network
  • View profiles and add new friends
  • Share your photos and videos
  • Create your own group or join others

Recent activities

  • Charles Ponzi created a new topic ' FIFA: US vs Swiss Bankers: Julius Baer' in the forum.
    Banker Admits to Money Laundering in FIFA Case

    By REBECCA R. RUIZJUNE 15, 2017
    Continue reading the main story
    Share This Page

    Share
    Tweet
    Email
    More
    Save

    Photo
    A former executive of the Swiss bank Julius Baer is the first banker to plead guilty in a broad FIFA corruption case. Credit Michael Buholzer/Agence France-Presse — Getty Images

    Jorge Luis Arzuaga, a former managing director at the Swiss bank Julius Baer, pleaded guilty to money laundering conspiracy in Brooklyn federal court on Thursday, revealing his role in the United States’ sweeping criminal case focused on FIFA, the governing body of international soccer.

    Mr. Arzuaga, who admitted to arranging the financial transfers of more than $25 million in bribes and kickbacks from 2010 to 2015, became the first banker publicly convicted in a case that has felled dozens of soccer officials and marketing and media executives since it was announced two years ago. His conviction suggests a new phase for the case, shifting its focus to the financial institutions through which bribe money traveled.

    The Swiss have pursued similar charges against Mr. Arzuaga, the United States Justice Department said Thursday, and a resolution is expected to be announced soon. The conviction of Mr. Arzuaga, a citizen of Argentina who worked for the Zurich bank until 2015, would be Switzerland’s first in its parallel investigation into FIFA, which has its headquarters in Zurich. Switzerland’s Office of the Attorney General did not immediately respond to a request for comment Thursday.

    Over the last two years, the Swiss authorities have provided significant assistance to the United States in carrying out arrests, extraditing defendants and responding to requests for information otherwise protected by the nation’s strict privacy laws. Switzerland’s Office of the Attorney General announced its own investigation into FIFA, after early-morning raids at a five-star hotel in 2015 that resulted in the first wave of arrests and upended soccer’s global leadership.
    Continue reading the main story
    Related Coverage

    More Charges as FIFA Inquiry Widens DEC. 3, 2015
    In FIFA Inquiry, Switzerland Aids U.S. but Is Wary of Being Eclipsed DEC. 5, 2015
    FIFA, Embracing Role as Victim, Seeks to Collect Millions in U.S. Case MARCH 16, 2016

    ADVERTISEMENT
    Continue reading the main story

    Appearing in United States District Court in Brooklyn on Thursday, Mr. Arzuaga, 56, promised to pay more than $1 million to the government, adding to the hundreds of millions of dollars so far pledged by the convicted defendants. Mr. Arzuaga joins dozens of international soccer officials and marketing and media executives — predominantly from South and Central America — who have been convicted to date.

    A 236-page indictment released by the Justice Department in 2015 named numerous financial institutions, including Julius Baer, one of the banks at which Mr. Arzuaga worked, as having handled bribes paid to officials charged in the case. Mr. Arzuaga left Julius Baer that spring, shortly after the Swiss police had carried out the first surprise arrests at the behest of the United States Justice Department.

    On Thursday, William F. Sweeney, Jr., the head of the F.B.I.’s New York office, emphasized that the case was continuing.
    Newsletter Sign Up
    Continue reading the main story
    Sports

    Get the big sports news, highlights and analysis from Times journalists, delivered to your inbox every week.
    You agree to receive occasional updates and special offers for The New York Times's products and services.

    See Sample Manage Email Preferences Privacy Policy
    Opt out or contact us anytime

    “This plea shows how wide-ranging and systemic corruption once was in one of the world’s most popular sports,” Mr. Sweeney said in a statement. “Our work is nowhere near finished, and we will continue to pursue each and every corrupt member of this scheme until each is brought to justice.”

    The United States investigation — a coordinated effort of the Justice Department, the F.B.I. and the I.R.S. criminal investigation division — has relied heavily on financial forensics and the tracing of bribe payments through the international banking system to America. The 2015 indictment specifically highlighted a $5 million wire transfer to a Julius Baer bank account in the name of a company affiliated with Torneos y Competencias, an Argentine sports marketing firm that has already pleaded guilty in the American case and promised to pay the government more than $112 million.

    The indictment does little to disguise the identity of one of the soccer officials who received the payments: Julio Grondona, a longtime FIFA and Argentine soccer association official who died in 2014. The indictment said Mr. Arzuaga also arranged for money in accounts held by Mr. Grondona to be distributed to his heirs after his death.

    Julius Baer itself has been scrutinized by American prosecutors, who may have considered charging the bank for its role in helping to launder bribe money to soccer officials.

    “We are pursuing the bad actors — including soccer officials, sports marketing companies, financial institutions and their bankers — who have intentionally and criminally violated the law by laundering illegal proceeds,” said Richard Weber, chief of the I.R.S. criminal investigation division. “Prospective private bankers and relationship managers should take note of Mr. Arzuaga’s conviction and think twice about the consequences of conspiring to launder money.”

    Unrelated to the soccer case, Julius Baer is under a deferred prosecution agreement with the Justice Department after admitting last year to having helped American clients evade taxes and hide billions of dollars in offshore accounts. Under that agreement, the bank promised to pay $547 million to the United States for assisting clients with hiding money and filing false tax returns fro
    m at least the 1990s to 2009.

    Read More...
    2 weeks ago
  • Charles Ponzi created a new topic ' Re-opening FOS Determinations: Treasury' in the forum.
    Submissions are due in 2 weeks.
    treasury.gov.au/ConsultationsandReviews/...mentary-Issues-Paper

    SUPPLEMENTARY ISSUES PAPER
    Review of the financial system external dispute resolution framework
    Consultation on the establishment, merits and potential design of a compensation scheme of last resort and the merits and issues associated with providing access to redress for past disputes
    May 2017

    © Commonwealth of Australia 2017
    ISBN 978-1-925504-48-4
    This publication is available for your use under a Creative Commons Attribution 3.0 Australia licence, with the exception of the Commonwealth Coat of Arms, the Treasury logo, photographs, images, signatures and where otherwise stated. The full licence terms are available from creativecommons.org/licenses/by/3.0/au/legalcode.

    Use of Treasury material under a Creative Commons Attribution 3.0 Australia licence requires you to attribute the work (but not in any way that suggests that the Treasury endorses you or your use of the work).
    Treasury material used ‘as supplied’
    Provided you have not modified or transformed Treasury material in any way including, for example, by changing the Treasury text; calculating percentage changes; graphing or charting data; or deriving new statistics from published Treasury statistics — then Treasury prefers the following attribution:
    Source: The Australian Government the Treasury.
    Derivative material
    If you have modified or transformed Treasury material, or derived new material from those of the Treasury in any way, then Treasury prefers the following attribution:
    Based on The Australian Government the Treasury data.
    Use of the Coat of Arms
    The terms under which the Coat of Arms can be used are set out on the It’s an Honour website (see www.itsanhonour.gov.au).
    Other uses
    Enquiries regarding this licence and any other use of this document are welcome at:
    Manager
    Communications
    The Treasury
    Langton Crescent
    Parkes ACT 2600
    Email: This email address is being protected from spambots. You need JavaScript enabled to view it.


    CONTENTS
    Consultation Process iv
    Introduction 1
    Scope 5
    Compensation scheme of last resort 9
    Problem being addressed — uncompensated consumer losses 9
    Existing framework for compensating losses in the financial system 10
    Compensation arrangements outside of the financial services industry 15
    International financial services industry compensation schemes 17
    Evaluation of a compensation scheme of last resort 19
    Potential design of a compensation scheme of last resort 22
    Legacy unpaid EDR determinations 32
    Providing access to redress for past disputes 34
    Problem being addressed — access to redress 34
    Approaches to providing access to redress for past matters 37
    Evaluation of providing access to redress for past disputes 39
    Design issues with providing access to redress for past disputes 41
    Consultation questions 47
    Appendix A — Amended Terms of Reference 51
    Appendix B — Examples of schemes outside the financial sector that provide for past matters 53


    CONSULTATION PROCESS
    REQUEST FOR FEEDBACK AND COMMENTS
    Interested parties are invited to lodge written submissions on the issues raised in this Paper by 28 June 2017.
    All information (including name and address details) contained in submissions will be made available to the public on the external dispute resolution review website at www.treasury.gov.au/ConsultationsandRevi...onsultations/2016/FS external dis
    pute resolution unless the party making the submission indicates that all or part of the submission is to remain confidential. Automatically generated confidentiality statements in emails are not sufficient for this purpose. Respondents who would like part of their submission to remain confidential should provide this information marked as such in a separate attachment. A request made under the Freedom of Information Act 1982 for access to a submission marked confidential will be determined in accordance with that Act.
    To ensure that the privacy of third parties is protected, and that the Commonwealth complies with its own legal obligations, some submissions may be published with some details removed or may not be published. In addition, all or parts of submissions may not be published: if they promote a product or a service; contain offensive language or the sentiments expressed are liable to offend or vilify sections of the community; or for reasons other than those outlined.
    Submissions should include the name of the organisation (or name if the submission is made by an individual) and contact details including an email address and telephone number where available. While submissions may be lodged electronically or by post, electronic lodgement is strongly preferred. For accessibility reasons, please email responses in a Word or RTF format. An additional PDF version may also be submitted.
    Closing date for submissions: 28 June 2017
    Address written submissions to:
    Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
    Mail: EDR Review Secretariat
    Financial System Division
    Markets Group
    The Treasury
    Langton Crescent
    PARKES ACT 2600
    Enquiries: Enquiries can initially be directed to the EDR Review Secretariat by emailing This email address is being protected from spambots. You need JavaScript enabled to view it..


    INTRODUCTION
    1. The Review’s amended Terms of Reference require the Panel to:
     make recommendations on the establishment, merits and potential design of a compensation scheme of last resort; and
     consider the merits and issues involved in providing access to redress for past disputes.
    WHY REDRESS MATTERS
    2. These issues are of significant public interest given the scale of financial losses suffered by Australian investors in recent years. Estimates suggest that over 80,000 people have been affected with losses totalling more than $5 billion (or $4 billion after compensation and liquidator recoveries).
    3. For those individuals who have suffered losses, the effect on their lives can be devastating. Additionally, where those individuals have not been able to receive compensation or even have their case heard, this undermines trust and confidence in the financial system.
    4. In April 2017, the Panel made 11 recommendations to enhance the financial system’s dispute resolution framework, recognising that consumers and small business should have effective access to redress. On 9 May 2017, the Government accepted all of these recommendations.
    5. The Panel’s view is that implementation of these recommendations will help to ensure that financial firms will provide compensation for wrongful losses through the EDR system. However, in a limited number of cases this may not occur, for a number of reasons. This Issues Paper seeks feedback on these situations, and possible models to resolve them.
    BACKGROUND
    6. In recent years, a number of inquiries have considered the causes of financial failures and the issue of compensating investors for their losses, including:
     the Parliamentary Joint Committee on Corporations and Financial Services Report, Inquiry into financial products and services in Australia (November 2009);
     Mr Richard St. John’s report, Compensation arrangements for consumers of financial services (2012);

     the Senate Economics References Committee Report, Agribusiness managed investment schemes: Bitter harvest (March 2016);
     the Parliamentary Joint Committee on Corporations and Financial Services Report, Impairment of customer loans (May 2016); and
     the Australian Small Business and Family Enterprise Ombudsman Report, Inquiry into small business loans (December 2016).
    7. Consumers currently have a number of avenues for obtaining compensation, including:
     internal dispute resolution (IDR) — individuals can approach the firm directly to seek a resolution;
     external dispute resolution (EDR) — individuals can approach the Financial Ombudsman Service (FOS), Credit and Investments Ombudsman (CIO) or the Superannuation Complaints Tribunal (SCT) to have their complaint resolved;
     self initiated private action — individuals can sue in court or obtain an outcome through private negotiation, mediation or arbitration;
     private class action — individuals can start or join a class action where people who have suffered loss from the same type of misconduct bring a group action;
     the winding up process of a financial firm (external administration); and
     action taken by the Australian Securities and Investments Commission (ASIC) to obtain compensation for consumers — ASIC can take action through negotiations with the firm, legal or other enforcement action, or by leading a class action.
    8. In its Interim Report, the Panel observed that where consumers are denied access to justice due to a financial firm’s lack of resources to pay a determination issued by an EDR scheme, this has serious and significant consequences for the individual consumer and undermines trust and confidence in the broader financial system.
    9. This Supplementary Issues Paper continues the Panel’s examination of the EDR framework by seeking the views of interested stakeholders on the establishment, merits and potential design of a compensation scheme of last resort and the merits and issues involved in providing access to redress for past disputes.

    REVIEW PROCESS TO DATE
    10. On 20 April 2016, the Government announced this review of the financial system’s EDR and complaints framework (EDR Review). On 8 August 2016, the Terms of Reference for the Review were released.
    11. On 9 September 2016, the Panel released an Issues Paper and received 127 submissions from stakeholders. These submissions informed the Panel’s Interim Report, which was released for consultation on 6 December 2016 and sought stakeholder views on 11 draft recommendations. Fifty-six submissions were received.
    12. Among other issues, the Review’s original Terms of Reference directed the Panel to make observations, but not recommendations, on the establishment of a statutory compensation scheme of last resort. In their responses to the first Issues Paper, a number of stakeholders made submissions on this issue which informed the Panel’s observation in the Interim Report that there is considerable merit in establishing an industry funded compensation scheme of last resort.
    13. On 2 February 2017, the Minister for Revenue and Financial Services amended the Review’s Terms of Reference to include recommendations on the establishment, merits and potential design of a compensation scheme of last resort. The Panel was also asked to consider the merits and issues involved in providing access to redress for past disputes. The amended Terms of Reference are contained in Appendix A.
    14. On 3 April 2017, the Panel provided to the Government its Final Report on matters covered by the original Terms of Reference (other than that relating to a compensation scheme of last resort).
    Final Report
    15. On 9 May 2017, the Government released the Panel’s Final Report on the matters covered by the original Terms of Reference (other than that dealing with a compensation scheme of last resort) and the Government’s response to that Report. The Report makes 11 recommendations which represent an integrated package of reforms that will see the EDR framework well placed to address current problems and ensure it is designed to withstand the challenges of a rapidly changing financial system. The Government has accepted the Panel’s 11 recommendations.
    16. The Panel’s central recommendation is the establishment of a new single EDR body for all financial disputes (including superannuation disputes) to replace FOS, CIO and SCT. This is to be implemented via the establishment of the new Australian Financial Complaints Authority.

    17. The Government has also, relevantly, accepted the Panel’s recommendations that:
     consumers and small businesses are provided with enhanced access to redress through higher monetary limits and compensation caps;
     the single EDR body be subject to enhanced accountability measures, including an independent assessor to review complaints about its handling of disputes;
     ASIC be provided with a general directions power to allow it to compel performance from the single EDR body if it does not comply with legislative and regulatory requirements; and
     improvements be made to increase the transparency and accountability of IDR processes.
    Next steps
    18. The Panel is to report to the Government on the matters covered by the amended Terms of Reference in the second half of 2017. The table below outlines the chronology of events.
    19. The purpose of publishing this Supplementary Issues Paper is to seek the views of interested stakeholders on matters covered by the amendment to the Review’s Terms of Reference.
    20. The Panel encourages stakeholders interested in the matters raised in this Supplementary Issues Paper to make a submission by 28 June 2017.
    21. The Panel will consider information provided in submissions and will conduct further consultations before providing an additional report to the Government in the second half of 2017.
    Event Date
    Issues Paper on original Terms of Reference released 9 September 2016
    Interim Report on original Terms of Reference released 6 December 2016
    Minister for Revenue and Financial Services amended the Review’s Terms of Reference 2 February 2017
    Final Report on matters covered in the original Terms of Reference provided to Government 3 April 2017
    Final Report and Government response released 9 May 2017
    Issues Paper on matters covered in amended Terms of Reference released 31 May 2017
    Additional Report on matters covered by the amended Terms of Reference to be provided to the Government Second half of 2017
    SCOPE
    22. The amended Terms of Reference require the Panel to undertake two separate but related tasks:
     make recommendations on the establishment, merits and potential design of a compensation scheme of last resort; and
     consider the merits and issues involved in providing access to redress for past disputes.
    23. The Panel considers that these tasks raise different issues, which might involve different policy considerations, funding models and administrative arrangements. The Panel is, therefore, approaching them as separate and distinct pieces of analysis.
    24. Given the Review’s Terms of Reference focus on the EDR system, this has been the Panel’s main focus in setting out issues surrounding a compensation scheme of last resort and access to redress for past disputes. However, the Panel is also interested in views on whether judgments and decisions from other dispute resolution processes, such as courts and tribunals, should also be considered.
    25. The Panel has outlined below its understanding of the scope of the amended Terms of Reference, and the issues that fall within that scope.
    26. However, the Panel wishes to make clear that it has not made a final decision on any of the issues contained in this Supplementary Issues Paper and welcomes all stakeholder comments and feedback, including on whether the Panel’s scoping of issues is appropriate.
    REVIEW PRINCIPLES
    27. In undertaking its review, as required by its Terms of Reference, the Panel will have regard to the Review’s core principles of efficiency, equity, complexity, transparency, accountability, comparability of outcomes and regulatory costs.
    PRINCIPLES GUIDING THE REVIEW
    Efficiency
    Any framework should provide outcomes in an efficient manner. This requires ensuring the framework possesses adequate coverage, powers, remedies, resources (that is, funding and skilled staff) to enable issues to be resolved quickly and with a minimum of resources.
    Equity
    Individuals should be treated fairly and be able to easily access any framework.
    Complexity
    Any framework should have minimal complexity. It must be easy to navigate and use, with a focus on informality.
    Transparency
    Any framework should be transparent and open. Users should have access to appropriately tailored information, including about what outcomes they can reasonably expect from the process.
    Accountability
    Relevant information should be made publicly available. There should also be scope for periodic independent reviews and responses to these reviews.
    Comparability of outcomes
    Any framework should ensure that individuals receive comparable outcomes, both procedurally and substantively.
    Regulatory costs
    The regulatory settings should, as appropriate, utilise market forces and avoid creating moral hazards. The framework should impose the minimum amount of regulatory costs necessary to ensure effective user outcomes. These costs should, where appropriate, be borne by those who create the requirement for regulation, with incentives for costs to be minimised.


    28. The diagram below depicts how the Panel sees the amended Terms of Reference in relation to a compensation scheme of last resort and access to redress for past disputes interrelating:


    Compensation scheme of last resort
    29. The Panel takes as its starting point the premise that a compensation scheme of last resort is to be considered in the context of a dispute which:
     has been the subject of a decision; and
     has remained unsatisfied because, for example, the firm is insolvent, has ceased trading or otherwise has insufficient assets to pay the claim.
    30. Although the Review’s Terms of Reference are focused on the EDR system, as part of its analysis, the Panel will be considering whether a compensation scheme of last resort should be available in situations where a court or tribunal has ordered that a consumer or small business be compensated and this has not occurred.
    31. The Panel views the issue of a compensation scheme of last resort in a prospective way which means that should a scheme be established, it would be open to claimants who in the future receive a decision in their favour, but which is not ultimately paid.
    32. The Panel considers that separate arrangements may need to be put in place to address legacy uncompensated losses, such as existing unpaid EDR determinations.
    33. These matters are discussed in more detail in the ‘Compensation scheme of last resort’ section of this Issues Paper.
    Redress for past disputes
    34. The question of providing access to redress for past disputes is very complex.
    35. The Panel considers that consumers and small businesses that have obtained a decision from any dispute resolution process (including from a tribunal or a court) have had access to redress and therefore are outside the Review’s amended Terms of Reference. (If as part of that decision the consumer or small business was awarded compensation but this has not been paid, this will form part of the Panel’s consideration of a potential compensation scheme of last resort.)
    36. In this Issues Paper, the Panel has primarily focussed its consideration of this issue on situations where consumers or small businesses with disputes of a type that could be resolved through EDR have, for various reasons, not been able to resolve their disputes to date. However the Panel is interested in views about the proposed scope.
    37. The Panel considers that potential scenarios could include where:
     the financial firm no longer exists (for example, because of insolvency) and therefore the dispute was either never lodged with an EDR scheme or was lodged but unable to proceed to determination;
     the monetary value of the dispute exceeded the EDR scheme’s monetary limits at the time, but could potentially fall within the monetary limits of the new Australian Financial Complaints Authority (once established);
     the dispute was outside of the EDR scheme’s time limits; or
     the consumer or small business did not pursue their dispute with the EDR scheme for other unspecified reasons (for example, because of personal circumstances, the costs of pursuing the dispute or emotional distress).
    38. These matters are discussed in more detail in the ‘Providing access to redress for past disputes’ section of this Issues Paper.
    Questions — Scope and principles
    1. Is the Panel’s approach to the scope of these issues appropriate? Are there any additional issues that should be considered?
    2. Do you agree with the way in which the Panel has defined the principles outlined in the Review’s Terms of Reference? Are there other principles that should be considered?

    COMPENSATION SCHEME OF LAST RESORT
    39. The amended Terms of Reference require the Panel to make recommendations on the establishment, merits and potential design of a compensation scheme of last resort.
    40. In its Interim Report, the Panel expressed the view that in circumstances where the market is unable to provide a solution to the problem of uncompensated consumer losses, there is considerable merit in introducing an industry funded compensation scheme of last resort. In light of the amendment to the Terms of Reference, the Panel is seeking additional information from stakeholders on these issues.
    41. In this section of the Issues Paper, the Panel first considers the problem which a compensation scheme of last resort seeks to address: the issue of uncompensated consumer losses. This is followed by a discussion of the financial system’s existing framework for compensating consumer losses and the compensation arrangements in other sectors and internationally. The Issues Paper then describes the arguments which are made for and against a compensation scheme of last resort, and discusses the potential design issues with such a scheme. Finally, the issue of legacy unpaid determinations is considered.
    PROBLEM BEING ADDRESSED — UNCOMPENSATED CONSUMER LOSSES
    42. Under the existing EDR framework, there are situations where an EDR body orders that a claimant be paid compensation, but that compensation is not paid.
    43. As at 2 May 2017, $13,909,635.50 (excluding interest) and $399,862 (excluding interest) in determinations made in favour of complainants by FOS and CIO, respectively, had not been paid.
    44. These uncompensated losses are relevant to the Panel’s Terms of Reference in two ways. First, they indicate a problem that is likely to recur, creating further unpaid determinations in the future (which is the focus of most of this section). Secondly, it raises the question of whether complainants who have an existing unpaid determination should be compensated (which is considered in more detail at paragraphs [116]-[123]).

    45. The impact of uncompensated consumer losses can be significant and wide ranging, including:
     individuals will often experience severe emotional distress and financial hardship;
     costs may be imposed on the wider Australian community as individuals are forced to rely on other forms of support, including the social security system; and
     there is an undermining of trust and confidence in the EDR framework and the financial services sector more generally.
    46. The wide-ranging nature of these losses is relevant when considering how to define ‘compensation’. For example, the Panel has heard from a stakeholder that compensation should include restitution and compensation for non economic impacts, as well as direct financial losses.
    EXISTING FRAMEWORK FOR COMPENSATING LOSSES IN THE FINANCIAL SYSTEM
    47. Where an individual suffers financial loss, they can seek compensation from the relevant firm and, in certain circumstances, from targeted compensation schemes. These schemes, which are considered in further detail at paragraphs [64] [72], cover losses associated with:
     where a market participant of the Australian Securities Exchange becomes insolvent and fails to meet its obligations to a person who had previously entrusted property to it;
     bank deposits and general insurance policies related to an Australian Prudential Regulation Authority (APRA) regulated entity in the event of insolvency; and
     fraudulent conduct or theft related to APRA regulated superannuation funds.
    48. Given the existence of unpaid EDR determinations, it is clear this framework is not delivering effective outcomes for some of its users.

    Firm level compensation arrangements
    49. The Corporations Act 2001 requires that if a financial services licensee provides a financial service to a person as a retail client, the licensee must have arrangements for compensating the person for loss or damage suffered because of breaches of the relevant obligations under Chapter 7 of the Act by the licensee or its representatives.
    50. Financial services cover a range of activities including:
     providing financial product advice;
     dealing or making a market in a financial product;
     providing custodial or depository services; and
     operating a registered managed investment scheme.
    51. Similarly, the National Consumer Credit Protection Act 2009 provides that a licensee must have adequate arrangements for compensating persons for loss or damage suffered because of a contravention of the Act by the licensee or its representatives.
    52. The objective of these requirements is to reduce the risk that losses cannot be compensated because of a licensee’s lack of financial resources.
    53. The justification for these compensation requirements include that consumers and small businesses:
     are not always in a position to assess the information provided by a licensee or the worth of the service provided;
     can incur severe financial hardship through losses resulting from the licensee’s conduct; and
     expect the level of comfort provided by a compensation regime.
    54. ASIC has stated in its regulatory guidance on the compensation and insurance arrangements for financial services licensees that the compensation requirements imposed by the Corporations Act 2001 are not intended to cover:
     product failure or general investment losses;
     all possible consumer losses relating to financial services;
     claims for loss solely as a result of the failure (for example, through insolvency) of a product issuer (that is, it is not intended to underwrite the products of a product issuer); or
     a return on a financial product that has not met expectations.
    Compensation arrangements involving professional indemnity insurance
    55. The requirement to have arrangements in place to compensate consumers is, unless the financial services licensee is an exempt licensee, subject to the requirement that the licensee hold ‘adequate’ professional indemnity insurance cover. Exempt licensees include:
     a general insurance company regulated by APRA under the Insurance Act 1973;
     a life insurance company regulated by APRA under the Life Insurance Act 1995; and
     an authorised deposit taking institution regulated by APRA under the Banking Act 1959.
    56. This exemption results in a large number of EDR scheme member firms not relying on professional indemnity insurance to compensate their customers where they suffer financial loss.
    57. For those firms required to hold professional indemnity insurance, the question of whether an insurance policy is adequate depends on a number of factors, including:
     the amount and scope of cover;
     whether the terms and conditions of the cover undermine the objective of providing compensation; and
     whether the licensee has sufficient financial resources to enable the professional indemnity insurance policy to work in practice.
    58. In relation to having sufficient financial resources available, ASIC has observed that firms should assess what financial resources are required (to cover the excess and gaps in cover due to various exclusions) and ensure they have appropriate financial resources available.
    59. Before granting an Australian Financial Service (AFS) Licence, ASIC asks licence applicants about their professional indemnity insurance arrangements and will not grant a licence until it is satisfied that the applicant has the necessary arrangements in place. However, ASIC does not approve professional indemnity insurance arrangements, nor does it have data about the renewal of advice licensees’ professional indemnity insurance cover.
    60. The Panel notes there is currently a paucity of data about the professional indemnity insurance market, in particular, the policies held by financial services licensees and credit licensees. This raises particular challenges for the Panel.
    61. The objective underpinning the professional indemnity insurance requirement is to reduce the risk to a firm that compensation claims cannot be satisfied by the firm due to a lack of financial resources. It is not to provide compensation directly to consumers.
    62. ASIC, in its December 2015 report, Professional indemnity insurance market for AFS licensees providing financial product advice, identified a number of the inherent limitations of using professional indemnity insurance as a compensation mechanism, including:
     ‘[professional indemnity] insurance is designed to protect AFS licensees against business risk. It is neither intended nor designed to provide compensation directly to consumers. Therefore, even if a consumer is successful in their claim made to an EDR scheme, it is the AFS licensee that must make a claim on its PI insurance to compensate the consumer as required. The consumer cannot claim directly on the PI insurance’; and
     ‘[w]hile ASIC provides detailed guidance to AFS licensees, [it] cannot regulate for a market driven product. [It] cannot require insurers to extend or limit cover, nor can [it] prescribe key product features or policy terms, or influence price or the operation of exclusions and excesses’.
    63. Submissions to the Panel’s Issues Paper of 9 September 2016 also indicated there are significant limitations in relying upon professional indemnity insurance to provide compensation to consumers, which are outlined below.
    Limitations of using professional indemnity insurance as a compensation mechanism
    Stakeholders responding to the Panel’s Issues Paper indicated there are significant limitations in using professional indemnity insurance as a compensation mechanism, including:
    • the total funds available under a policy may not cover all of the compensation awarded against the insured;
    • the policy may not cover the conduct which gave rise to the order for compensation (for example, fraud);
    • the amount of compensation payable may be less than the policy’s excess; and
    • cover may not have been taken out at all and self certification often means this is only discovered after the firm is insolvent.

    Compensation schemes for specific losses in the financial system
    64. A number of targeted compensation schemes currently operate in the financial system to protect consumers from specific types of losses.
    National Guarantee Fund
    65. The National Guarantee Fund (NGF) is a compensation fund available to meet certain claims which arise from dealings with participants of the Australian Securities Exchange (ASX) and, in limited circumstances, participants of ASX Clear Pty Limited, which provides clearing and settlement services. A range of claims can be paid under the NGF, but of particular relevance are claims relating to compensation for loss that results if a market participant becomes insolvent and fails to meet its obligations to a person who had previously entrusted property to it.
    66. The NGF is open to both wholesale and retail clients. There is no cap on claims of compensation for loss arising where a market participant fails to complete a sale or purchase of securities, makes an unauthorised transfer of securities, or cancels or fails to cancel a certificate of title to quoted securities. The scheme is funded by ASX participants.
    Financial Claims Scheme
    67. The Financial Claims Scheme is an Australian Government scheme that protects retail clients of authorised deposit taking institutions (ADIs) and policy holders of APRA regulated general insurance companies from potential loss due to the failure of these institutions.
    68. For banks, building societies and credit unions incorporated in Australia, the Scheme provides protection to depositors up to $250,000 per account holder per ADI. The Scheme seeks to provide depositors with timely access to their protected deposits in the unlikely event of the failure of their ADI.
    69. For general insurers, the Scheme provides compensation to eligible policyholders with valid claims against a failed general insurer. Under the Scheme, most policyholders with the affected general insurer are covered for valid claims up to $5,000. For any valid claims of $5,000 and over, the policyholder or claimant must be eligible under certain criteria.
    70. The Scheme is funded by recovery action through insolvency proceedings, and if the assets are insufficient, through an industry levy on other ADIs or general insurers.
    Part 23 of the Superannuation Industry (Supervision) Act 1993
    71. Part 23 of the Superannuation Industry (Supervision) Act 1993 makes provision for the grant of financial assistance to APRA regulated superannuation funds that have suffered loss as a result of fraudulent conduct or theft. The loss must also have caused a substantial diminution of the superannuation fund leading to difficulties in the payment of benefits.
    72. Compensation limits are at the Minister’s discretion with previous grants ranging from 90 to 100 per cent of the eligible loss. If the Minister, after seeking the advice of APRA, is satisfied that the loss has caused a substantial diminution of the superannuation fund and that the public interest requires action, a financial grant may be made by government to the fund. The scheme is industry funded through a levy on APRA regulated superannuation funds and approved deposit funds.
    COMPENSATION ARRANGEMENTS OUTSIDE OF THE FINANCIAL SERVICES INDUSTRY
    73. Compensation schemes for particular types of losses have also been established from time to time in other sectors. Several examples are described below.
    Fair Entitlements Guarantee
    74. The Fair Entitlements Guarantee is an Australian Government funded scheme of last resort that provides financial assistance for unpaid employee entitlements to eligible employees who lose their job due to the liquidation or bankruptcy of their employer. To be eligible, employees need to lodge a claim with the Government within either 12 months of losing their job or the liquidation or bankruptcy of their former employer, whichever is later. Directors of companies (and their spouses or relatives) and contractors are excluded from the scheme.

    75. Once entitlements are paid to an employee under the Guarantee, the Government stands in the shoes of the employee as a subrogated creditor and is entitled to claim the amount paid, and is given priority over other unsecured creditors. The Government may also provide funds to liquidators to enable recovery efforts of the Guarantee from entities, including initiating legal proceedings to recoup any funds paid.
    Travel Compensation Fund
    76. The national licensing rules for travel agents, which were in place until 30 June 2014, required participation in the Travel Compensation Fund (TCF) as a precondition for being licensed. The TCF’s purposes were to:
     ensure that only persons who had sufficient financial resources could join, or continue to participate in, the fund and therefore carry on business as a travel agent; and
     provide compensation to eligible consumers who had suffered financial loss as a result of the bankruptcy or insolvency of a registered travel agent.
    77. The TCF, which closed at the end of 2015, provided for compensation to be paid to consumers in circumstances where they had paid a licensed travel agent for travel or travel related services, and that agent subsequently failed to arrange the services requested by the consumer.
    78. The TCF was funded, relevantly, through: initial contributions by new participants; initial administration fees by new participants; and ongoing annual renewal fees.
    NSW Law Society Fidelity Fund
    79. Administered by the NSW Law Society, the Fidelity Fund receives annual contributions from solicitors as part of their Practising Certificate requirements. The money received is used to pay compensation to members of the public who successfully claim financial loss due to a solicitor’s or firm’s dishonest failure to pay or deliver trust money or property.

    80. Upon receipt of a claim, the Law Society may make further enquiries. The Fidelity Fund Management Committee decides the claim and it can allow, disallow, compromise or settle it. For almost all claims, there is a limit on payments of a total of $1,000,000 for all claims against a particular solicitor or firm. The Law Society may increase this amount, but is not obliged to do so.
    Motor Car Traders Guarantee Fund
    81. The Motor Car Traders Guarantee Fund operates in Victoria to, relevantly, meet the cost of successful claims made by consumers who have suffered a loss after purchasing a car, motorcycle or commercial vehicle, as a result of the trader failing to comply with certain conditions of the Motor Car Traders Act 1986 (Vic) (such as compliance with warranty provisions or transferring title to the car).
    82. Claims for compensation from the Fund are heard by the Motor Car Traders Claims Committee. Attempts must have first been made to resolve the complaint directly with the motor car trader (IDR). Making a claim is free of charge, with the maximum amount awarded being $40,000. The Fund is funded through motor car traders’ licensing fees and penalties paid for breaches of the Motor Car Traders Act 1986 (Vic). The Fund seeks to recover amounts paid out against the licensee.
    INTERNATIONAL FINANCIAL SERVICES INDUSTRY COMPENSATION SCHEMES
    83. Compensation schemes have been established in the financial services industry in other jurisdictions to address issues associated with consumers who have suffered financial losses (see table below).
    84. While a number of the schemes in these jurisdictions are targeted at specific types of loss, similar to the existing approach in Australia, the United Kingdom has introduced a single, comprehensive scheme covering a broad range of losses, including those not currently covered by Australia’s targeted compensation schemes, such as losses associated with poor quality financial advice.

    Table: International financial services industry compensation schemes
    United Kingdom Canada United States European Union
    Range of claims covered The scheme covers banks and building societies, credit unions, insurance, home finance, investments, pensions and endowments Provides protection for cash, securities and other property held by investment firms on behalf of clients Protects against the loss of cash and securities held by clients of a brokerage firm Provides protection where an investment firm is unable to return money or instruments belonging to its investors
    When can an applicant apply? When the scheme is satisfied the firm is unable, or likely to be unable, to pay claims against it When the firm becomes insolvent When the firm becomes insolvent When the authorities have determined the firm is unable to meet its obligations arising out of investor claims
    Who can apply? Individuals and small businesses All investors are eligible All investors (with limited exceptions) Normally retail investors
    Level of compensation awarded For investment claims, up to £50,000 per person per firm Up to C$1 million Up to US$500,000 for securities and cash (including a $250,000 limit for cash only) The Directive requires minimum compensation of €20,000 per investor, but Member States can provide higher levels
    Funding Industry funded Industry funded Industry funded Industry funded
    Administration Independent scheme but accountable to the regulators Independent scheme Independent scheme Independent schemes

    Questions — Existing compensation arrangements
    3. What are the strengths and weaknesses of the existing compensation arrangements contained in the Corporations Act 2001 and National Consumer Credit Protection Act 2009?
    4. What are the strengths and weaknesses of the National Guarantee Fund, the Financial Claims Scheme and Part 23 of the Superannuation Industry (Supervision) Act 1993?
    5. Are there other examples of compensation schemes of last resort that the Panel should be considering?

    EVALUATION OF A COMPENSATION SCHEME OF LAST RESORT
    85. In response to the Panel’s Issues Paper of 9 September 2016 and Interim Report of 6 December 2016, the Panel received a large number of submissions which supported establishing a compensation scheme of last resort, although there were different views expressed in relation to the scheme’s design. Stakeholders submitted that the current compensation arrangements for consumers were inadequate and that a scheme was important to:
     ensure that consumers who suffer loss from misconduct are compensated;
     build trust and confidence in the current EDR arrangements; and
     ensure trust and confidence in the financial services sector more generally.
    86. Consistent with the view that the existing compensation requirements should be strengthened, the Australian Bankers’ Association (ABA) submitted that it supported establishing a mandatory, prospective compensation fund that covers individuals and small businesses who have received poor financial advice, and have not been paid a determination made by an ASIC approved EDR scheme due to the validated insolvency or wind up of a financial advice business, where all other redress avenues have been exhausted. Further information on the ABA’s proposal is set out later in this section.

    87. The ABA also stated that a scheme should be accompanied by other reforms to reduce the likelihood of unpaid determinations, including:
     a greater professionalisation of financial advice (the Panel notes the Government’s recent reforms to lift the professional, education and ethical standards of financial advisers);
     expanding the availability and coverage of professional indemnity insurance, including run off cover, insolvency, fraud and other misconduct;
     ensuring the scheme is well understood by consumers of financial products so that it is clear it is a last resort scheme, and not intended to cover investment losses; and
     ASIC requiring an annual assurance statement from all AFS licensees that they have met their licence obligations, including compliance with ASIC’s Regulatory Guide 126: Compensation and insurance arrangements for AFS licensees and Regulatory Guide 166: Licensing: Financial requirements.
    88. The Panel also received submissions from stakeholders who held concerns about a compensation scheme of last resort, stating amongst other matters that:
     all taxpayers would be required to subsidise the scheme, as even with risk mitigation strategies, risk would not be fully priced into the market, with market participants and regulators taking on extra risk;
     it would be inequitable to impose the costs associated with a compensation scheme of last resort on compliant financial firms;
     appropriate professional indemnity and capital requirements would reduce the likelihood of unpaid FOS determinations in the first place and these should take priority; and
     any increase in levies or other funding would increase the costs for firms, with many of those costs ultimately borne by consumers.
    89. A number of submissions also referred the Panel to the 2012 report prepared by Mr Richard St. John, Compensation arrangements for consumers of financial services.

    Richard St. John report: Compensation arrangements for consumers of financial services
    In April 2010, Mr Richard St. John was asked by the Australian Government to consider the need for, and costs and benefits of, a statutory compensation scheme for financial services.
    In April 2012, the report was published and it concluded that it would be inappropriate, and possibly counter productive, to introduce a more comprehensive last resort compensation scheme to underpin the current relatively light compensation regime for financial advisers and other providers of financial services. Given the limited regulatory measures to protect retail clients from the risk of licensee insolvency, it was found that it would be inappropriate to require more responsible and financially secure licensees to underwrite the ability of other licensees to meet claims against them for compensation.
    The report made a number of recommendations aimed at strengthening the existing compensation requirements, including:
    • licensees providing additional assurances to ASIC in relation to their professional indemnity insurance cover; and
    • for ASIC to take a more proactive stance on monitoring licensee compliance with compensation requirements.
    In April 2013, the then Australian Government released its response accepting the report’s recommendations.

    90. The Panel is also aware that there are claims that moral hazard issues may arise with the existence of a compensation scheme of last resort. Moral hazard can arise where individuals assume risks as they know someone else is protecting them against possible financial loss.
    91. The introduction of a scheme may, for example, encourage consumers to become complacent about the risks of dealing in the market and induce riskier behaviour by financial firms. Further, it may reduce the incentive for stringent regulation or rigorous administration of the existing compensation arrangements.

    Questions — Evaluation of a compensation scheme of last resort
    6. What are the benefits and costs of establishing a compensation scheme of last resort?
    7. Are there any impediments in the existing regulatory framework to the introduction of a compensation scheme of last resort?
    8. What potential impact would a compensation scheme of last resort have on consumer behaviour in selecting a financial firm or making decisions about financial products?
    9. What potential impact would a compensation scheme of last resort have on the operations of financial firms?
    10. Would the introduction of a compensation scheme of last resort impact on competition in the financial services industry? Would it favour one part of the industry over another?
    11. What flow on implications might be associated with the introduction of a compensation scheme of last resort? How could these be addressed to ensure effective outcomes for users?
    12. What other mechanisms are available to deal with uncompensated consumer losses?
    13. What relevant changes have occurred since the release of Richard St. John’s report, Compensation arrangements for consumers of financial services?

    POTENTIAL DESIGN OF A COMPENSATION SCHEME OF LAST RESORT
    92. The Review’s Terms of Reference require the Panel to make recommendations on the potential design of a compensation scheme of last resort. Some of the potential design features are outlined below.
    Types of claims covered
    Inclusion of small business disputes
    93. The Corporations Act 2001 requires financial services licensees to have dispute resolution and compensation arrangements in place for financial services provided to a retail client in accordance with the Corporations Act 2001. A retail client, relevantly, includes consumers and small businesses. Under the National Consumer Credit Protection Act, licensees must be a member of an approved external dispute resolution scheme and have in place adequate compensation arrangements. As a matter of principle, there are strong policy grounds for small businesses having access to any compensation scheme of last resort.
    Financial advice disputes vs all disputes
    94. Disputes relating to the provision of financial product advice currently make up the largest proportion of unpaid FOS determinations. These are followed by disputes with operators of managed investment schemes and credit providers.
    95. In terms of the types of disputes covered by a compensation scheme of last resort, a broad compensation scheme would provide the greatest possible protection for consumers and small business. However, it would also increase the potential costs for those responsible for funding the scheme, who may then seek to pass those costs on, for example, to their customers and shareholders.
    Accessing the scheme
    Qualifying conditions
    96. Before a claimant can access a compensation scheme of last resort, there is the potential for imposing qualifying conditions. For example, the claimant may have to prove they have received an EDR determination in their favour and the relevant firm (which is a member of the compensation scheme) is insolvent, has stopped trading or has insufficient assets to meet the claims made against it. Claimants may also have to wait for a specified period of time before making a claim or prove they have taken particular steps to satisfy the EDR determination from the firm.
    97. An additional issue is how an individual could access a compensation scheme of last resort where the financial firm is insolvent and unable to defend a matter which is brought before an EDR body. Under the existing EDR scheme arrangements, there is the potential for complaints to be closed early in the process where there is no reasonable prospect of any order for compensation being met.
    Court judgments
    98. If a compensation scheme of last resort was established, it could apply only in relation to unpaid EDR determinations, or it could also apply where court-ordered compensation had not been paid. If a scheme were to include court judgments, it would be necessary to consider whether this should be subject to any restrictions—for example, whether any payments from the scheme should be subject to the monetary limits and compensation caps that apply in the EDR system.
    99. Class action litigation would raise further questions—such as whether claimants with a right to compensation arising from a class action should have access to the scheme at all; whether payments from the scheme should include payments for legal costs or only compensation; and whether litigation funders should be able to recover from the scheme, either directly or indirectly through their contracts with the class of claimants.
    Reviewing an EDR scheme’s determinations
    100. Where an individual has received an EDR determination in their favour, a question arises in relation to whether any compensation scheme of last resort is able to independently review the EDR determination or whether it should simply accept the EDR scheme’s determination of the merits of the dispute.
    101. In the United Kingdom, after an individual has made a claim to the Financial Services Compensation scheme (FSCS), the FSCS investigates and decides for itself, based on its own rules and liability standards, whether an individual should be paid compensation. That is, it is not bound by an EDR determination. For example, in relation to claims made against certain investment businesses, the FSCS may pay compensation “only to the extent that the FSCS considers that the payment of compensation is essential in order to provide the claimant with fair compensation”.
    Funding
    102. Internationally, compensation schemes of last resort in the financial sector are industry funded. However, there is also the possibility of other funding models, such as those which have a degree of government involvement.
    103. Under an industry funding model, there are a variety of ways to allocate the scheme’s cost amongst contributors. For example, the United Kingdom’s FSCS adopts a funding class model to cover its compensation costs. A participant firm’s permissions to conduct activities determine which class, or classes, it belongs to. If a firm is a member of more than one funding class, they are required to contribute to both classes. Each of the relevant funding class has a threshold to try to ensure that firms’ contributions to the FSCS are affordable and sustainable. If compensation and specific costs in a funding class are so high that the threshold is breached, firms in other classes are called upon to contribute.
    104. While grouping firms based on the types of activities they carry on can create incentives for firms to work together at an industry level to improve practices, it can result in levies being subject to high degrees of volatility where those activities are subject to a high number of claims.

    105. By contrast, while a single class funding model may reduce volatility, it raises issues around cross subsidisation as firms in one sector who are operating consistent with their legal obligations are required to subsidise the actions of firms in other sectors who are not.
    106. The Panel notes that the United Kingdom’s Financial Conduct Authority is currently consulting on options for changing the funding of the FSCS and the coverage it provides to consumers, and specific proposals to change rules around the scope and operation of FSCS funding.
    Compensation caps
    107. In compensation schemes of last resort, caps are often placed on the total size of claims that can be paid in order to manage the impact on the scheme from any one event. If any scheme was limited to unpaid EDR determinations, the compensation caps or monetary limits for the EDR scheme could act as limits for the scheme.
    Scheme administration
    108. There are a number of ways that a compensation scheme of last resort could be administered. For example, the scheme could be administered by Government with appropriate legislative backing (similar to the Fair Entitlements Guarantee, as described above).
    109. Alternatively, the scheme could be industry administered with regulatory oversight. For example, an industry administered scheme, including its terms of reference, could be introduced by legislation. Similarly to the current provisions which require particular firms to be a member of an approved EDR scheme, legislation could require particular firms also to be members of a compensation scheme of last resort.
    110. Any compensation scheme of last resort could form a part of the existing industry EDR arrangements, or operate as a stand alone scheme.
    A scheme’s ability to recover compensation
    111. In circumstances where a compensation scheme of last resort makes a payment to a claimant, the scheme may seek to recover this compensation from the firm that failed to satisfy the EDR determination. For example, as described earlier in this section of the Issues Paper, under the Fair Entitlements Guarantee program, once entitlements are paid to the employee, the Commonwealth stands in the shoes of the employee as a subrogated creditor and is entitled to claim in the liquidation and is given priority over other unsecured creditors under the Corporations Act 2001.
    112. A related issue is the role played by ASIC where an EDR scheme member fails to pay a determination. For example, ASIC may have a role in bringing regulatory action against the firm and those who control it.
    Interaction with other compensation schemes
    113. A number of compensation schemes already operate within the financial services sector. For example, the Superannuation Industry (Supervision) Act 1993 provides for compensation dealing with losses from fraudulent conduct or theft in an APRA regulated superannuation fund.
    114. The introduction of a compensation scheme of last resort would raise issues about how the new scheme would interact with existing schemes. It would be important to ensure that consumers knew which scheme to access depending on the circumstances and that firms were making appropriate financial contributions.
    Stakeholder proposals for a compensation scheme of last resort
    115. In response to the Panel’s initial Issues Paper and Interim Report, submissions were received from a number of stakeholders on this issue, with the ABA and FOS providing detailed comments. The Panel has highlighted these proposals to assist stakeholders in responding to design issues, but they do not represent a preferred view of the Panel. A summary of these two proposals is contained below.
    Australian Bankers’ Association proposal
    The ABA supports establishing a mandatory, prospective compensation fund that covers individuals and small businesses who have received poor financial advice, and have not been paid a determination made by an ASIC approved EDR scheme due to the validated insolvency or wind up of the financial advice business, where all other redress avenues have been exhausted.
    However, the ABA believes that managing the risk to consumers of unpaid determinations requires a multifaceted response. The introduction of a last resort compensation scheme must be accompanied by other measures and reforms to reduce the likelihood of unpaid EDR determinations, both to ensure the scheme is truly a last resort, and promote the long term viability and success of a scheme. These measures include reforms relating to professional indemnity insurance, AFS licensing criteria, enhanced enforcement ASIC powers, and the professionalisation of financial advice.
    Australian Bankers’ Association proposal (continued)
    Types of claims covered
    The scheme should cover failures that arise in the context of a relationship where personal advice on Tier 1 products, and/or general advice on Tier 1 products is provided to retail customers. Tier 1 products are all financial products except those listed under Tier 2. Tier 2 products are generally simpler and better understood than Tier 1 products. The failure could relate to Corporations Act 2001 breaches, fraud, negligence, misrepresentation and administrative errors connected with the advice relationship.
    The scheme should cover general advice provided by financial advisers, product manufacturers and robo advisers (who deliver financial advice online using algorithms and technology), as well as personal advice to avoid market distortions and take account of the low level of consumer understanding of the difference between personal and general advice. The scheme is not intended to cover retail bank staff providing retail banking services.
    The scheme should not cover businesses that only provide dealing or arranging services, such as securities dealers or derivatives dealers, nor should it cover research houses that publish reports containing general advice.
    Scheme membership
    The scheme should require all AFS licensees who offer personal financial product advice and certain general advice to a retail client to be a member and contribute to the scheme. The scheme should be mandatory, with compulsion underpinned by a legislative or regulatory requirement.
    Access to the scheme
    There should be a validated insolvency or wind up of the financial advice business, and all other redress avenues should have been exhausted.
    Generally, there would be an expectation that a customer would resort to the financial adviser (and through the financial adviser the professional indemnity insurer), the financial resources of the financial adviser, and would have explored legal enforcement options. Evidence will be required (possibly from a registered liquidator or administrator) that the assets of the financial advice business will not cover the determination.

    Australian Bankers’ Association proposal (continued)
    Funding
    Broadly, the ABA supports a levy structure comprising:
    • a prefunded establishment levy, based on borrowings from industry;
    • prefunded management levies to support the operation of the compensation scheme of last resort and repay establishment levies; and
    • prefunded compensation levies.
    Funding contributions need to be calculated taking into account different advice models, such as general advice representative models, product manufacturers that provide financial advice, and robo advice businesses. The calculation would need to balance appropriate risk weightings with the cost of administering the contributions.
    The introduction of a scheme should work in an integrated way with other regulatory, professional and risk management structures, so as to actively encourage improved practice and professionalism at the level of individual advisers and practices.
    Compensation caps
    The ABA is of the view that the size of disputes and the quantum of compensation awards considered by the scheme should align with or be no greater than that provided by the EDR scheme.
    Scheme administration
    The structure of the scheme should be developed through flexible, industry based processes, with appropriate legislative underpinning to ensure all financial advisers contribute to the scheme. A largely industry based process will ensure the scheme can be established in a timely way, and to enable flexibility to adjust its remit, terms of reference and processes over time.
    The governance arrangements should include:
    • a board, with representation including an independent chair, a legal expert and an equal number of industry and consumer representat
    2 weeks ago
  • Charles Ponzi created a new topic ' Whistleblower law firm Zuckerman Law' in the forum.
    Zuckerman Law Washington DC Whistleblower Retaliation and Award Law Firm

    202.262.8959

    Home
    Whistleblower Lawyers
    Services
    Testimonials
    Resources
    Press
    Blog
    Contact

    Home /
    Whistleblower Protection Law Blog
    Image of Comey's Testimony Underscores Need for Strong Whistleblower Protections
    Comey’s Testimony Underscores Need for Strong Whistleblower Protections

    By Jason Zuckerman | June 13, 2017
    4

    For me, the most telling moment of former FBI Director Jim Comey’s June 8th testimony occurred early in the hearing, when Mr. Comey choked up as he recalled the White House’s publicly stating that the President had fired him because the “FBI was in disarray.”

    This emotional display seemed out of character for Mr. Comey. While U.S. Attorney for the Southern District of New York, he successfully prosecuted organized crime. As Deputy Attorney General during the George W. Bush Administration, Mr. Comey refused to sign an extension of the warrantless domestic spying program and defied the White House Counsel and Chief of Staff. Mr. Comey can fairly be described as a “tough guy.” So how did he go from leading the most powerful law-enforcement agency worldwide to being labeled a “leaking liar”?

    To an experienced whistleblower advocate, Mr. Comey’s predicament is not surprising. Mr. Comey’s experience, unfortunately, is like those of many whistleblowers I have represented over more than a decade. President Trump promised to bring a business approach to government—and his retaliation against Mr. Comey is straight out of the corporate defense playbook. Corporations typically take the following steps of escalating retaliation to silence whistleblowers:
    Intimidate and Silence the Whistleblower

    In his June 8th testimony, Mr. Comey described in detail how the President had asked him to drop the investigation of Michael Flynn and had conditioned Mr. Comey’s job on “loyalty” to him. Senator Rubio expressed skepticism about Mr. Comey’s feeling intimidated by the President and blamed Mr. Comey for not pushing back. But that type of Monday-morning quarterbacking ignored the power dynamics of the conversation. Mr. Comey wanted to keep his job and was understandably reluctant to accuse the President of obstructing an investigation.

    Whistleblowers often confront this intimidation tactic in the workplace. A supervisor or senior company official tells the whistleblower to “let it go,” “mind your own business,” or learn to be a “team player.” And in some cases, the whistleblower is told to shut up if he or she wants to remain employed. Threats of retaliation, whether express or implicit, are powerful tools to silence a whistleblower. When a company officer or senior manager orders a subordinate to do something unlawful or to cover up unlawful conduct, holding firm to one’s ethical values is not an easy avenue to follow. As Mr. Comey learned, refusing to carry out an unlawful order may be career suicide, at least in the short term.
    Retaliate Swiftly and Severely Against the Whistleblower

    Initially, the bizarre method of firing Mr. Comey seemed surprising for a President who perfected the art of firing on his reality show, The Apprentice. Mr. Comey was not given an opportunity to resign; he was not even notified that he had been fired. But now that we know about the President’s real motive for firing Mr. Comey, it’s clear that his tack was deliberate.

    Mr. Comey learned of his firing while addressing FBI agents at a Los Angeles field office when the announcement flashed across a television screen. The White House had announced Mr. Comey’s firing without notifying Mr. Comey himself. President Trump sent a loud and clear message to Mr. Comey and to every senior government official about the consequence of disloyalty.

    In the corporate workplace, whistleblower-employees are similarly humiliated as a warning to their colleagues. A whistleblower may be escorted out of the office with security guards while other employees are present, pulled out of a meeting and fired on the spot in front of colleagues, or simply fired via text message. When a corporation fires a whistleblower in this humiliating fashion, it ensures that all other employees know the consequence of whistleblowing.
    Badmouth the Whistleblower and Their Work History

    Firing Mr. Comey in a humiliating and offensive manner served only as phase one. President Trump then defamed Mr. Comey and asserted that he fired him because of chaos within the FBI, as well as the alleged loss of confidence in Mr. Comey among FBI agents.

    These statements stand in stark contrast to the President’s repeated, public praise of Mr. Comey before Mr. Comey refused to comply with the President’s “hope” that Mr. Comey drop the investigation of Flynn. Indeed, if President Trump believed that Mr. Comey’s leadership caused chaos within the FBI, then why did the President invite Mr. Comey to continue to serve as FBI Director?

    This patent distortion of Mr. Comey’s performance record is an all-too-common experience of whistleblowers. Prior to blowing the whistle, they receive strong performance evaluations and bonuses; they are valued members of the team. But once they blow the whistle and refuse to drop their concerns, they are suddenly deemed incompetent and unqualified for their position. And when a company realizes that it lacks any existing basis to fire the whistleblower, it creates one by subjecting the whistleblower to heightened scrutiny and setting the whistleblower up to fail. For example, a company might place the whistleblower on a performance-improvement plan that contains impossible objectives, and then fire the whistleblower for not meeting those unattainable goals.

    This tactic may backfire and enable a whistleblower to ultimately prevail at trial, but the damage to the whistleblower’s reputation is permanent. Prospective employers are reluctant to hire someone who previously fired for poor performance and are especially reluctant to hire a whistleblower. Many whistleblowers never find comparable employment and must accept lower-level positions, earning a fraction of what they did before their wrongful termination.
    Attack the Whistleblower’s Credibility

    Apparently, President Trump has no evidence to rebut Mr. Comey’s vivid account of the President’s alleged attempts to obstruct justice. So President Trump called him a “liar.”

    Desperate to defend themselves at all costs, corporations frequently employ this tactic—labeling the whistleblower a disgruntled former employee who will say anything to win his or her case. So far, this is not working well for President Trump, whose accusation merely serves to shine a spotlight on his own questionable credibility.

    Attacking a whistleblower’s credibility is an effective and pernicious tactic in many whistleblower cases. Once expelled from a company, a whistleblower is marginalized and alienated from former coworkers. The key witnesses continue to work at the company and, fearing retaliation, are reluctant to corroborate the whistleblower’s testimony. Though whistleblowers may still prevail (for example, by using documentary evidence), the attack on a whistleblower’s credibility is odious because the company fired the whistleblower precisely for having integrity.
    Create a Post-Hoc Justification for Firing the Whistleblower

    Prior to firing Mr. Comey, President Trump papered the file with a post-hoc justification for the firing. After the President decided to fire Mr. Comey, Deputy Attorney General Rod Rosenstein was tasked with drafting a memorandum to the Attorney General outlining concerns about Mr. Comey’s performance. Most of those concerns focus on Mr. Comey’s statements about the investigation of former Secretary of State Hillary Clinton’s use of a private email server. Surely President Trump knew of those public statements when he repeatedly asked Mr. Comey to remain as FBI Director (as long as he could pledge “loyalty” and drop the Flynn investigation).

    In this case, the White House’s initial reliance on the Rosenstein memo as the basis for the decision to fire Mr. Comey backfired because President Trump told NBC anchor Lester Holt that he had decided to fire Mr. Comey regardless of the memo. In many whistleblower-retaliation cases, however, these types of pretextual memos may be persuasive. Some judges even rely on such memos, which mask the real reason for a firing or other adverse action, to grant the company summary judgment and deny the whistleblower a jury trial.

    On the other hand, creating a post-hoc justification for a retaliatory adverse action sometimes misfires by providing strong evidence of pretext and spurring a jury to award punitive damages. For instance, a former in-house counsel at Bio-Rad Laboratories recently secured more than $11 million in damages at trial in a Sarbanes-Oxley whistleblower-retaliation case. The jury awarded $5 million in punitive damages because Bio-Rad had backdated a negative performance evaluation of the whistleblower that the company drafted after it fired him.
    Focus on the Whistleblower’s Alleged Misconduct

    To distract attention from what may be obstruction of justice, President Trump and his attorney have focused on Mr. Comey’s leak to the press and have alleged that the leak was unlawful. This accusation seems frivolous because Mr. Comey did not leak classified information, grand jury material, or other sensitive information. Instead, he revealed that President Trump had conditioned his continued service as FBI Director on his agreeing to drop the investigation of Flynn. As a private citizen, Mr. Comey has a constitutional right to blow the whistle to the media about this matter of public concern. Mr. Comey did not reveal to the media information from FBI investigative files or classified information. Yet President Trump and his allies compare Mr. Comey to leakers who illegally disclosed classified information. This is an appalling accusation against the former head of a law-enforcement agency.

    But this is another standard corporate defense tactic in whistleblower cases. To divert attention from the wrongdoing that the whistleblower exposed, the company uses its substantial resources to dig up dirt on the whistleblower. The company or its outside counsel examines the whistleblower’s timesheets and expense reports with a fine-tooth comb to find any discrepancy, reviews every email to find some inappropriate communication, and places all of the whistleblower’s work under a microscope to find any shortcoming.
    Sue the Whistleblower and Initiate a Retaliatory Investigation

    Firing Comey, concocting a pretextual basis for the firing, and branding him a leaking liar apparently was not sufficient retaliation. So shortly after his testimony, President Trump’s personal attorney announced his intention to sue Mr. Comey and/or file a complaint with the Department of Justice Office of Inspector General (OIG). I am skeptical that a civil action against Mr. Comey or an OIG complaint poses any real legal threat to Mr. Comey. To the contrary, such a complaint would likely pose a greater risk for President Trump, including potential counterclaims and the risk of being deposed or questioned under oath by the OIG.

    The misuse of legal process against corporate whistleblowers, however, is an especially powerful form of retaliation in that it can dissuade a whistleblower from pursuing their claims. When I defend against this form of abuse of process, I am always struck at the seemingly endless resources that the company will spend to prosecute claims lacking any merit or value. Fortunately, these claims can go awry by spawning additional retaliation claims under the whistleblower protection laws. And a jury can punish the employer for subjecting the whistleblower to abuse of process.
    Why Whistleblowers Deserve Strong Legal Protection

    In light of Mr. Comey’s distinguished record, he will likely bounce back and rebuild his career. But most corporate whistleblowers never fully recover. Too often they find their careers and reputations destroyed. Even when whistleblowers obtain monetary relief at trial, they are usually blacklisted from comparable positions, especially if they work in a small industry.

    Mr. Comey’s experience as a whistleblower is a stark reminder of what can happen to any employee who is pressured by a powerful superior to engage in unlawful conduct or to cover up wrongdoing. When intimidation tactics succeed, the public suffers. The company could be covering up threats to public health or safety, environmental contamination, financial fraud, defective products, or any other conceivable harmful wrongdoing.

    Courageous whistleblowers who put their jobs on the line deserve strong protection. As Congress embarks on a mission to gut “job killing” agencies, let us hope it will spare the very limited resources that are spent enforcing whistleblower-protection laws. Without such a large backlog of whistleblower cases, OSHA could have, for example, addressed the complaints of Wells Fargo whistleblowers years ago, potentially curbing or halting the bank’s defrauding of its customers. And Congress should consider filling the gaps in existing whistleblower laws. If Mr. Comey “lacked the presence of mind” to explicitly reject the President’s improper demand for him to drop the Flynn investigation, then surely most employees would also be reluctant to refuse an order to commit an unethical or unlawful act.

    After Mr. Comey’s testimony, Speaker Ryan pointed out that “[t]he President’s new at this. He’s new to government.” Mr. Comey’s testimony should be a lesson for the President about how to treat whistleblowers. To make America great again, the President should abandon the Rambo litigation tactics that apparently served him well in New York real-estate disputes, and instead view whistleblowers as allies, not as enemies. As Tom Devine of the Government Accountability Project and I argue in an article in the Emory Corporate Governance and Accountability Review, Draining the Swamp Requires Robust Whistleblower Protections and Incentives.

    Jason Zuckerman represents whistleblowers nationwide in whistleblower rewards and whistleblower retaliation claims. Recently Matt Stock and Zuckerman issued an ebook titled SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.



    SEC-Whistleblower-Program-Tips-from-SEC-Whistleblower-Attorneys-to-Maximize-an-SEC-Whistleblower-Award-image

    LinkedIn5TwitterGoogleFacebook22Tumblr

    Categories: Corporate Whistleblower, federal whistleblower protections, Whistleblower Protection, Whistleblower Protection Law, Zuckerman Law

    Tags: Corporate whistleblower protection, federal whistleblower protection, whistleblower protection, whistleblower protection laws
    About the author
    Avatar of Jason Zuckerman

    Jason Zuckerman, Principal of Zuckerman Law, litigates whistleblower retaliation, qui tam, wrongful discharge, and other employment-related claims. He is rated 10 out of 10 by Avvo, was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2015 and selected by his peers to be included in The Best Lawyers in America® and in SuperLawyers.

    Read More...
    2 weeks ago
  • Charles Ponzi created a new topic ' APRA's new laws on Bank Directors' in the forum.
    New laws could punish 'honest if mistaken judgments': Harrison Young

    8 June 2017

    Clancy Yeates

    www.smh.com.au/business/banking-and-fina...20170608-gwn8ls.html

    The government's plan to beef up the banking regulator's powers could see executives facing stiff penalties for "honest, if mistaken, risk judgments", Commonwealth Bank director Harrison Young says.

    Amid intense debate about how banks can improve their battered public reputations, Mr Young on Thursday weighed in on the new executive accountability facing banks which will give the regulator new powers to ban senior bankers.

    It's a very difficult thing to put into place and I'm not sure how it will work," Mr Young said of the new powers

    given to APRA.

    "Language in the Treasurer's announcement suggested bankers, not just the bank, but individual bankers,

    starting with the CEO and down into the organisation, could be punished for bad judgment regarding risk."

    Mr Young said that was very different from punishing misconduct in dealing with individual customers.

    "It seems to me you're sort of mixing up what seem like criminal penalties with honest, if mistaken, risk

    judgments."

    The new regime, announced in the budget, will require the Australian Prudential Regulation Authority to approve very senior appointments and influence how they are paid.

    Treasurer Scott Morrison has said the regulator will also have the power to act more quickly against executives who are "found guilty of crimes or caught in illicit activities where it affects their ability to do their job with competence, honesty, or integrity.”

    Mr Young said that if the laws were intended to only capture flagrantly stupid choices such as some banks made

    leading up to the global financial crisis, that might be acceptable, but it would be very difficult to write

    regulations that made that clear.

    Speaking later, he said that "risk management in banks is a team sport. It's like a continuous conversation, with individuals constructively challenging each other. It would be hard to make that sort of process work if you were assigning blame for bad decisions."

    The comments came as a former senior Barclays banker highlighted mortgage pricing as another dimension of the debate about banks' ethics.

    Steve Weston, a former head of mortgages at Barclays who now chairs a local peer-to-peer lender rival to banks, said Australian banks' practice of charging new home loan customers lower interest rates than many existing clients is the type of behaviour that will increasingly fall short of society's expectations of the financial sector.

    Steve Weston, OurMoneyMarket.

    "There are things that we are doing in Australia today, that if I went back to my former colleagues in the UK and said, 'How do you feel about these intro rates, how do you feel about differential pricing on standard variable mortgages between old customers and new', and they would go 'What? You're kidding,'" he said at a conference on banking and finance ethics.

    Mr Weston, who now chairs a non-bank competitor in OurMoneyMarket, questioned if that was an ethical practice on the part of banks.

    "How do [you] look customers in the eye and go, 'Hold on, guess what, this is what happens for loyalty – you pay

    more than the new person'."

    The comparison with the UK – where banks had to be rescued by the taxpayer during the global financial crisis, and where scandals uncovered have been more widespread than Australia – was played down by the chief executive of Westpac-owned BT Financial Group, Brad Cooper.

    Mr Cooper pointed out that Australian banks had not been embroiled in the same "mis-selling" scandals as banks in the UK.

    "Yes, we've still got things to do, but I think we're at very different starting points as well here, compared to where the UK was," Mr Cooper said.

    Another difference between the two markets is that most UK home loans are fixed-rate products, which are more difficult to renegotiate mid-way through a loan term.

    Mr Weston, who also advises banks on conduct issues, said some senior bankers realised the risks associated with some behaviour, but there was no incentive to be the "first mover". This idea – in economic jargon it is known as a "collective action problem" – is a key focus among regulators.

    Australian Securities and Investments Commission deputy chair Peter Kell said this tendency, whereby no bank wanted to move first to stamp out behaviour that might be questionable but was also profitable, was "pervasive" in finance.

    "That has a corrosive impact on outcomes for consumers and for people's adherence to basic ethical standards," Mr Kell said at the same conference.

    Mr Weston said mortgages were just one example where banks priced products in a way that was hard to justify.

    He also pointed to their use of "introductory rates" – where banks offer an attractive deal for a limited time,

    before customers revert to being more profitable for the lender.

    Several major local banks, for instance, have in recent months cut interest rates paid to long-term savers while boosting introductory rates, which are prominently advertised but paid to fewer people.




    Last modified on Monday, 12 June 2017
    Rate this blog entry:
    0
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10
    inShare
    0

    BFCSA: Background checks for bankers. Really??? ...

    Comments

    Please login first in order for you to submit comments

    Designed by CloudAccess.net

    Read More...
    2 weeks ago
  • The "Reserve Bank documents collusion in the antitrust trainwreck" list of lawyers in the Amex Settlement as at February 2009 is here at the back. See link below to Commonwealth Bank David Murray's review.

    Judge Garaufis found Amex misrepresented the RBA, Gary Friedman pointe at Keila Ravelo, Ravelo points at Feliz's scam litigation service company. The Victorian legal Services Board blames a landlord who says he was evicted, except the real landlord points his finger at scam litigation service company operators in Brighton because they boasted about the information they got from that foreign board.

    fsi.gov.au/files/2014/08/Supported_Resid...Action_Group_Inc.pdf

    Read More...
    3 weeks ago
  • Charles Ponzi created a new topic ' Suzi Burge, David Cohen & Justi Tonti' in the forum.
    independentaustralia.net/business/busine...he-same-part-1,10375

    (Image via @BankReformNow)

    The consumer protection inquiry began without fanfare and little MSM interest but bank victims' concerns are at least getting a hearing. Evan Jones reports in part one of this two-part investigation.

    THE CURRENT Senate Economics Committee Inquiry into consumer protection in the banking, insurance and finance sector held hearings in Sydney on Tuesday, 26 April 2017.

    You probably haven’t heard about this inquiry because the media has shown little interest. Save for scribes and witnesses waiting their turn, a mortgage broker victim and I were the only attendees. I’ve never before seen such a lack of interest in a Parliamentary inquiry hearing.

    Committee members presiding were Senator Chris Ketter (Labor, Chair), Senator Jane Hume (Liberal) and Senator Nick Xenophon (NXT).

    Those appearing before the Committee were representatives of the Australian Securities and Investments Commission (ASIC), the Financial Ombudsman Service, Choice, the Financial Rights Legal Centre and Consumer Action Law Centre, and a couple of financial industry associations. (I didn’t stay for the latter.)
    The Australian Securities and Investments Commission

    The Chair tackled the ASIC representatives on matters recently in the news — matters seriously embarrassing for ASIC.

    The first concerned the disclosure that ASIC had been for years workshopping its media releases regarding malpractice with the guilty parties. Sleuthing by The Australian’s Ben Butler (ex-Fairfax) after a long FOI battle, exposed the practice on 18 and 19 April. Fairfax’s Adele Ferguson complements the story on 21 April. This practice persisted during and after the 2013-14 Senate Inquiry into ASIC, in which ASIC was exposed as seriously derelict in its responsibilities.

    Notable is the reference to David Cohen’s involvement and ASIC’s kowtowing to him — Cohen at the CBA in 2014 but also at the AMP in 2006. This is the same David Cohen who, as CBA chief general counsel, played a dominant role in the foreclosure of close to 1,000 Bankwest business borrowers after the CBA takeover of Bankwest in December 2008 and the subsequent cover-up of its criminal character. ASIC’s deference to Cohen is definitely not a good look. Any sector that has a David Cohen as a senior player is a socially dysfunctional sector.

    The Chair also raised the matter, again from media exposure, that ASIC tolerated the persistent failure of Macquarie Bank to clean up its financial advisory arm — the failure including a compliant report from Ernst & Young.

    In reply, ASIC’s Deputy Chairman Peter Kell claimed that there was nothing untoward in ASIC-bank liaisons regarding media releases; in any case, the events are yesterday’s news. Kell also claimed that ASIC has ensured that Macquarie Bank is now well and truly accounting for past sins.

    The Chair let the parries from Kell go through to the keeper. ASIC’s sole problem, according to Kell, was the lack of additional definitive powers. For example, ASIC needs a "product intervention power" to head off products that are poorly or corruptly designed or are pushed onto the wrong people.

    Certainly, such an extension of powers for ASIC is desirable, but the Committee members allowed the ASIC representatives to set the character of the exchange. That exchange ended with hearty acceptance from the Committee members that ASIC is on the move and consumer protection is now looking rosy.
    The Financial Ombudsman Service (FOS)

    FOS’ Chief Ombudsman, Shane Tregillas, opened his segment with these claims (also published on the FOS website):

    In order to fairly and impartially resolve the disputes that come to FOS, we are independent of the parties to that dispute and of the government and of regulators. …

    [Our principles introducing FOS’ Terms of Reference] emphasise that what we do is resolve disputes fairly, informally and in a timely manner. They also stress the importance of seeking to resolve disputes cooperatively and transparently. These principles mean that, in resolving disputes, we seek to understand all aspects of the dispute without taking sides and then we make a decision based on the specific facts and circumstances of each dispute.…

    Tregillas has made such claims many times in similar circumstances. But the perennial experience of bank victims who go to FOS seeking help experience otherwise. They experience an institution incompetent and inefficient at best — in bed with the banks at worst.

    For bank victims, dealing with FOS is an immensely frustrating and depressing experience. They expect commitment, proper procedures and integrity and they generally get none of these. Time limits for the victims are arbitrarily determined, whereas the financial service providers – the guilty parties – determine their own time periods for responses.

    Several examples highlight FOS’ modus operandi. Tasmanian Suzi Burge’s complaint about the CBA was detailed in her submission’s chronology. FOS stuffed Burge around for several years, during which period her position deteriorated. FOS contented itself with partial documentation provided by the bank. FOS found in Burge’s favour on multiple counts but got the story wrong on several key accounts (as misled by the bank). Because of the (avoidable) inaccuracies, FOS’ resolution regarding compensation was trivial, incommensurate with the substance of its determination adverse to the bank. When Burge asked FOS to get it right, FOS, in the person of Justi Tonti-Fillipini, replied to the effect that, we got it wrong, that bothers me, but we’re worn out with your case, we’re understaffed, that’s it, we’re not changing anything, go away.

    Ms Tonti-Fillipini figures significantly in another case — that of the Goldsworthys and their company, Goldie Marketing, against the ANZ. Tonti-Fillipini informed the Goldsworthys’ consultant, Bruce Ford, over the phone (Ford recorded the exchange on 22 October 2014) that FOS could not take on their complaint because of staff shortages. The Goldsworthys then took FOS to court, claiming that denial of assistance on this basis was contrary to FOS’ charter.

    Tonti-Fillipini then penned a reconstructed file note, claiming a range of reasons why denial of assistance was appropriate — the note submitted to the court proceedings. Ford and the Goldsworthys were appropriately outraged. So was Senator Nick Xenophon, who opined that FOS should be disbanded and replaced by a statutory body. This matter has been admirably covered by ABC reporter Stephen Long, both on the 7.30 Report, 16 March 2016, and The Drum, 1 April 2016.

    Bizarrely, the court found for FOS (Goldie Marketing v FOS, VSC 282, 19 June 2015).

    Judge Cameron determined that:

    109 I find that the reasons given and decision made by Dr Tonti-Filippini in the November Jurisdictional Decision are "compelling" within the terms of the Operational Guidelines. They are convincing, rational, logical, reasoned and comprehensive. It has already been noted that those reasons (apart, of course, from the issue of staff resourcing) are not sought to be impugned or attacked by the plaintiffs.

    This is all just so much palaver. It may be that it was ill-advised to take FOS to court in the first place. Red lights would be flashing everywhere regarding this "attack" on the regulatory apparatus and its implied undermining of the "legitimacy" of the entire apparatus. FOS is transparently doing the bidding of ANZ in its refusal to handle the Goldworthys’ complaints. More, this impertinence of the judge complements the deep underlying bias of the courts against bank victims. That judicial bias can be read between the lines in the succeeding paragraph, where the substance of the bank customer’s complaints has been obliterated by the imperative of the bank cleaning up its books:

    Finally, the parties differed in relation to the impact of further delay in the resolution of their dispute. Whilst the plaintiffs stated that there is no urgency given the longevity of the dispute, ANZ submitted that it has effectively been prevented from exercising its enforcement rights for several years. By way of observation, it is highly desirable that commercial disputes are determined in an efficient and timely manner which invariably reduces the costs burden on all parties.

    For further exposure of FOS’s dirty linen, we turn to more submissions to the current consumer protection Inquiry.

    Let us begin with a submission (Name Withheld, #64) regarding a "trivial matter" concerning an ATM’s disbursement of a withdrawal. I have always been ready to concede that FOS handles small-scale complaints reasonably well. No. In this case, FOS refused to accept the complaint regarding the offending bank Westpac’s refusal to deal with the complainant’s concern.

    David Bibo’s submission #61 is salutary. Bibo doesn’t explain the nature of his complaint, but goes straight for the jugular. He notes that FOS rightly invalidated a "settlement" (apparently by a FOC "conciliator") that was forced on him through bullying ('How can one agree to be assaulted?', he notes) but then FOS overturned its own invalidation.

    In my own submission (#87) I claim simply that "FOS is simply corrupt”. Bibo lays it on.

    The apparent poor institutional culture and low ethical standards of the FOS and its members raise the question as to whether the FOS has any genuine intent or ability to identify, address and help prevent unconscionable, illegal and unethical behaviour of the type constantly and consistently indulged in by its members. The FOS is clearly biased towards its own members and a sham operation that regards itself and its members to be unaccountable to anyone. …

    Its members [Financial Service Providers] know they can continue to operate in a corrupt manner with immunity perpetually granted to them by the FOS in the secure knowledge that their days of getting away with misconduct, whether it is a breach of law or not, are protected by the FOS, the organisation that is meant to help protect consumers from them. …

    The FOS has become a corrupt organisation that now serves only it's equally corrupt members. When confronted with that corruption it chose to enforce and entrench it. The FOS, its conciliator and senior management representatives of the FSP lied to me in calculated, coordinated, premeditated manner.

    And so on.

    It is also instructive to examine a number of submissions for which the Secretariat has invited a FOS response — notably Harris (#74), Matheson (#75), Slattery (#76), Thomson (#78) and Nielen (#79). In addition to documenting the malpractice of the particular financial services provider/s (FSPs), the victim submission documents the maltreatment by FOS — long delays, transparently ludicrous decisions, occasional right evaluations that are backtracked on, or not reflected in the final determination.

    In each case, FOS has responded to the submissions with the same form letter. We have considered all material, it says. Well no it hasn’t. That’s a lie. We are independent, it says. By way of “proof”, it cites ASIC support (which merely indicts ASIC as well) then proceeds to claim that because we are formally independent, therefore, we are in practice independent! That’s a lie as well.

    Presumably, there is the delicate matter of not pursuing public disclosure of private details of a victim complaint. But the point of standard parliamentary inquiry procedure in seeking a response from a financial services provider or external dispute resolution organisation (as is FOS) is to seek correction or reinterpretation of the victim’s submission from that body. In all cases here, FOS merely responds with a vacuous standard form letter, without addressing the substance of the victims’ complaints.

    In the case of Suzi Burge (#69, as above) FOS’ standard letter response adds, without elaboration, a list of the court cases in which Burge has appeared (and lost). This peccadillo represents a de facto comment and involvement outside FOS’ charter (“independence”) and is reprehensible. It is a clear indication of FOS’ complicity with its bank funders. Ironically, FOS’ evaluation of the Burge complaint was that the CBA had indeed engaged in malpractice against her. FOS should be asking itself, "How did the courts come to a conclusion contrary to ours?" FOS’ charter, remember, is to provide a dispute resolution mechanism that avoids dependence on the court system.

    One of the FOS trio of senior managers appearing at the Inquiry hearing was Philip Field. Field himself is implicated in FOS’ dodgy practices. He apparently condoned the FOS’ rejection of the Goldsworthys’ complaint. In another case involving the NAB which attempted to corruptly manufacture security from a person not involved in some dodgy loans by the bank, Field sided with the bank though the evidence was naturally lacking. Field also oversaw the Determination in late 2014 legitimising the rejection by the CBA of the Sunshine Coast-based Caulfield family’s claims for financial hardship consideration and for inclusion in Queensland’s Farm Debt Mediation process.

    The Caulfields have incidentally raised a new complaint with FOS on the grounds of CBA’s ‘maladministration’ (FOS’ label for alleged bank malpractice) of their loan. FOS initially rejected this complaint on four grounds, all of which were transparently erroneous. FOS subsequently admitted that their grounds for rejection were wrong. But FOS has since moved to demanding comprehensive financial information from the Caulfields so as to assess their claims for compensation.

    The manifest unreliability of FOS means that this demand is possibly a fishing expedition to facilitate the CBA cleaning up its self-incriminating documentation that points to a corrupt manipulation of the entire loan process. It has come to the situation where bank victims can’t trust to hand information to FOS given the reasonable presumption that FOS, in collaboration with the bank offender, will use such information to crucify permanently a victim’s redress against bank malpractice.

    FOS’ slip is showing, and it doesn’t care who notices. Which highlights that FOS, like the corrupt financial system it protects, sees itself as immune from redress. This racket leaves the victims both desperate and enraged.

    Tregillas did raise the issue that:

    ‘ … current claim limits and compensation caps for consumers and small businesses under our jurisdiction are outdated and do need to be increased.’

    Certainly, both the current cutoff limit for accepting complaints and the limit of monetary compensation for small business complainants are arbitrary. More, they have been used cynically by FOS to stuff around SME complainants. However, it’s not clear that it would be a good thing to raise these limits for SMEs. If FOS has demonstrated that it is part of the problem rather than part of the solution in resolving malpractice against SMEs, raising the limits will merely compound the present bottomless pit of misery for SME victims. Either FOS should be disbanded or responsibility for external dispute resolution for SMEs should be taken from it.

    Dr Evan Jones is a retired political economist. Read Dr Jones' submission (#87) to the Senate Inquiry here. This is the first of a two-part investigation; part two tomorrow.

    Creative Commons Licence
    This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License

    Monthly Donation
    Frequency
    Amount
    $
    Single Donation
    Amount
    $

    Be informed. Subscribe to IA for just $5.


    Evan JonesSenate inquiryconsumer protection inquirySenate Inquiry into consumer protection in the banking insurance and finance sector#banksRCbanking royal commissionFOCASICCBAIan Narev
    Recent articles by Evan Jones (showing 10 of 67 articles | view all articles by this author)

    7 June 2017 | Senate Consumer Protection Inquiry: More of the same (Part 1)
    17 May 2017 | The Big Four, obscene profits and ScoMo's ineffectual bank levy
    21 February 2017 | French Film Festival 2017 and the cultural-political divide (Part 2)
    20 February 2017 | French Film Festival 2017 and the cultural-political divide (Part 1)
    10 February 2017 | Chief Justice Kiefel's role in failing victims of bank malpractice — Conclusion
    9 February 2017 | Chief Justice Kiefel's role in failing victims of bank malpractice — Part 2
    8 February 2017 | Chief Justice Kiefel's role in failing victims of bank malpractice (Part 1)
    25 September 2016 | Turnbull: Flunkey for the banking mafia
    16 September 2016 | Hey ScoMo — Banana Republic here we come!
    31 August 2016 | ICAC, Baird and corruption par excellence

    Share this article:
    Join the conversation Comments Policy
    Subscribe to IA
    Shop at IA
    Donate to IA

    We need YOU!

    IA punches above its weight.

    Help us sharpen our knuckledusters.

    PLEASE DONATE NOW!

    Ashbygate Book
    Support IA


    Advertise on IA
    Recent Comments

    Loco Lobo

    Onya, Jim. Its almost enough to make certain conspiracy theories make sense, i.e. these fuck...

    Trump, the Paris Climate Agreement and Scrooge McDuck · 3 minutes ago
    mikkk

    I have always said the only way to stop terrorists is to stop them wanting to be terrorists. You...

    Want to stop terrorism? Get out of the Middle East · 15 minutes ago
    oz-demigod

    Thanks for this Evan. It just goes to show how ineffectual is the FOS and how meaningless are the...

    The Consumer protection inquiry: More of the same (Part 1) · 1 hour ago
    Wayne Turner

    Yeap.

    Want to stop terrorism? Get out of the Middle East · 1 hour ago
    slorter

    The illegal invasion of Iraq in 2003 started the whole ball rolling! Our media and politicians...

    Want to stop terrorism? Get out of the Middle East · 1 hour ago

    Special Features

    About Us

    Independent Australia is a progressive journal focusing on politics, democracy, the environment, Australian history and Australian identity. It contains news and opinion from Australia and around the world. [ read more ]
    Site Pages

    Home | Contact Us | Advertise with us | Submission guidelines | Sitemap | Privacy Policy
    Contact Details

    PO Box 260, Isle of Capri, Qld, 4217
    Fax +61 7 5526 8217
    Contact Us

    Connect with us

    Youtube
    RSS Feed
    Google +
    Facebook
    Twitter


    Google+
    Latest Articles

    08 Jun 17 | Adani Board ‘decision’ a con: Why the Carmichael coal mine must be stopped
    08 Jun 17 | Want to stop terrorism? Get out of the Middle East
    07 Jun 17 | Senate Consumer Protection Inquiry: More of the same (Part 1)
    07 Jun 17 | Australian foreign policy and ISIS in the region
    07 Jun 17 | The lies Turnbull's Liberals spin

    Copyright © 2017 Independent Australia. All rights reserved[/size]

    Read More...
    3 weeks ago
  • Charles Ponzi created a new topic ' Douglass v Boutros-Ghali, Aug 2015' in the forum.
    Another case - in August 2015 too- related to the CBA IT Bribery Scandal under the watch of the CBA's chief executives who saw nothing until Feb 2015 they claim.

    Case Name: Shawn Douglass v. Computer Sciences Corp., et al.

    Case No.: 2015-1-CV-284957

    (1) Defendants Computer Sciences Corp. and Servicemesh, Inc.’s Motion to Dismiss for Forum Non Conveniens to Plaintiff’s First Amended Complaint
    (2) Defendants Computer Sciences Corp. and Servicemesh, Inc.’s Demurrer and Demurrer to Plaintiff’s First Amended Complaint, Subject to Their Motion to Dismiss for Forum Non Conveniens
    (3) Defendant Jeff Drake’s Motion to Dismiss for Forum Non Conveniens to Plaintiff’s First Amended Complaint
    (4) Defendant Jeff Drake’s Demurrer and Demurrer to Plaintiff’s First Amended Complaint, Subject to His Motion to Dismiss for Forum Non Conveniens
    (5) Defendant Teymour Boutros-Ghali’s Joinder in the Motions to Dismiss for Forum Non Conveniens filed by Defendants Jeff Drake and Computer Sciences Corporation and Servicemesh Inc.
    (6) Defendant Teymour Boutros-Ghali’s Demurrer to the First Amended Complaint

    On December 17, 2012, plaintiff Shawn Douglass (“Douglass”) executed an employment contract to join defendant Servicemesh, Inc. (“Servicemesh”) as CTO. (First Amended Complaint (“FAC”), ¶12.) Plaintiff Douglass’s compensation included an equity award totaling 598,644 options in Servicemesh stock (“Options”). (Id.) The employment contract included special acceleration rights for the Options in the event of a change of control such as merger or acquisition. (Id.) Upon a change of control, plaintiff Douglass would receive 25% of the Options immediately and 75% of the Options if a change of control occurred and the acquiring company terminated him within one year. (Id.)

    Beginning January 25, 2013, defendant Servicemesh asked plaintiff Douglass to reach out to potential acquirers and initiate discussions. (FAC, ¶13.) Plaintiff reached out to several large corporations, including defendant Computer Sciences Corporation (“CSC”). (Id.) On February 24, 2013, plaintiff Douglass and defendant Jeff Drake (“Drake”), Servicemesh’s Executive Vice-President of Corporate Development, began talks with defendant CSC and working on the due diligence process. (FAC, ¶¶5 and 14.) In mid-March 2013, several other corporations expressed an interest in acquiring defendant Servicemesh. (FAC, ¶15.) Defendant Drake and plaintiff Douglass collaborated daily to coordinate the various due diligence matters. (FAC, ¶16.) For months, plaintiff Douglass participated in meetings with several interested bidders in parallel with defendant CSC to obtain the best price. (Id.)

    Beginning September 21, 2013, plaintiff Douglass was systematically excluded from the acquisition process and his access to the CSC deal room was revoked. (FAC, ¶17.) Officers and directors of defendant Servicemesh excluded plaintiff Douglass with the knowledge that defendant Servicemesh was going to cancel the stock option plan and redistribute the money saved from cancellation of plaintiff Douglass’s stock. (FAC, ¶18.)

    On October 28, 2013, defendant Drake informed plaintiff Douglass that cancellation of the employee option plan was likely but defendant Servicemesh’s CEO, Eric Pulier (“Pulier”) was working to obtain solid retention packages including one for plaintiff Douglass. (Complaint, ¶¶12 and 19.) After receiving confirmation that the employee option plan would be cancelled, plaintiff Douglass spoke to Pulier who told plaintiff Douglass not to worry about his stock options since the offer letter from CSC “will make up for it” and plaintiff Douglass would get a “big offer” from CSC with Pulier’s help. (FAC, ¶¶20 – 21.) Defendant Drake repeated Pulier’s statements about receiving an offer from CSC that would compensate plaintiff for his lost options. (FAC, ¶21.)

    On October 29, 2013, after seeking clarification from Servicemesh’s CFO, Teymour Boutros-Ghali (“Boutros-Ghali”), plaintiff was advised to sign the requisite disclosure documents or face termination for cause without any compensation. (FAC, ¶22.) Pulier and defendant CSC’s CTO, Dan Hushon (“Hushon”), further assured plaintiff he would receive compensation comparable to the options being eliminated in the acquisition. (Id.) In reliance on Pulier’s promises and under threat of termination, plaintiff Douglass signed disclosure documents and a release of claims. (FAC, ¶23 – 28.) Acquisition of defendant Servicemesh by defendant CSC closed on November 15, 2013. (FAC, ¶29.)

    On November 21, 2013, plaintiff Douglass received an offer letter with only a modest increase in compensation. (FAC, ¶30.) Plaintiff Douglass did not receive any restricted stock units or other compensation as promised by Pulier. (Id.) On December 7, 2013, plaintiff Douglass informed defendant CSC that he would like to be made whole on the canceled stock options as Pulier promised. (FAC, ¶31.) On December 10, 2013, defendant CSC’s Chief Human Resources Officer, Sunita Holtzer, stated defendant CSC’s general counsel would investigate and respond to plaintiff. (FAC, ¶32.) On February 12, 2014, plaintiff advised CSC that a number of financial representations made by defendant Servicemesh to defendant CSC were not accurate and specifically that there was a conflict of interest. (FAC, ¶33.) On March 11, 2014, plaintiff Douglass was informed that he was being terminated without any severance or consideration for the canceled stock options and promises made to him by defendant Servicemesh and/or CSC. (FAC, ¶34.)

    On August 27, 2015, plaintiff Douglass filed a complaint against defendants Servicemesh and CSC asserting claims for:

    (1) Breach of Oral Contract
    (2) Promissory Estoppel
    (3) Breach of the Implied Covenant of Good Faith and Fair Dealing
    (4) Intentional Misrepresentation
    (5) Negligent Misrepresentation
    (6) Unfair Business Practices Under Bus. & Prof. Code §17200
    (7) Unjust Enrichment
    (8) Restitution
    (9) Wrongful Termination/ Retaliation

    On November 16, 2015, plaintiff Douglass filed a first amended complaint (“FAC”) which now asserts causes of action for:

    (1) Breach of Oral Contract
    (2) Promissory Estoppel
    (3) Breach of the Implied Covenant of Good Faith and Fair Dealing
    (4) Intentional Misrepresentation
    (5) Negligent Misrepresentation
    (6) Unfair Business Practices Under Bus. & Prof. Code §17200
    (7) Unjust Enrichment
    (8) Restitution
    (9) Wrongful Termination/ Retaliation
    (10) Failure to Pay Wages
    (11) Declaratory Relief

    On January 15, 2016, defendants CSC and Servicemesh filed the first two motions now before the court, a motion to dismiss for forum non conveniens and, subject to the motion to dismiss, a demurrer to plaintiff’s FAC.

    On February 5, 2016, defendant Drake filed the second two motions now before the court, a motion to dismiss for forum non conveniens and, subject to the motion to dismiss, a demurrer to plaintiff’s FAC.

    Pursuant to a joint stipulation, the court issued an order on February 24, 2016 continuing the hearing on the above matters to April 21, 2016.

    On March 25, 2016, defendant Boutros-Ghali filed the last two motions now before the court, a joinder to the motions to dismiss for forum non conveniens filed by CSC, Servicemesh, and Drake and a demurrer to the FAC.

    Pursuant to a joint stipulation, the court issued an order on April 20, 2016 continuing the hearing on all of the above matters to June 2, 2016.

    I. Defendants CSC and Servicemesh’s motion to dismiss for forum non conveniens is DENIED.

    “A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion … [t]o stay or dismiss the action on the ground of inconvenient forum.” (Code Civ. Proc., §418.10, subd. (a)(2).) “When a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.” (Code Civ. Proc., §410.30, subd. (a).)

    As a preliminary matter, the court considers where the burden of proof lies. The court notes that, “[o]n a motion for forum non conveniens, the defendant, as the moving party, bears the burden of proof.” (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751; see also Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1675 (Ricoh)—“The defendant bears the burden of proof in attempting to override the plaintiff’s choice of forum.”) Once the defendant meets that initial burden, “the party opposing the enforcement of a forum-selection clause (generally the plaintiff) bears the burden of proof. [Citation.]” (Ricoh, supra, 12 Cal.App.4th at p. 1680.)

    Here, defendants’ motion to dismiss is based upon the assertion of a forum selection clause. “Although not even a ‘mandatory’ forum selection clause can completely eliminate a court’s discretion to make appropriate rulings regarding choice of forum, the modern trend is to enforce mandatory forum selection clauses unless they are unfair or unreasonable. [Citations.] In California, the procedure for enforcing a forum selection clause is a motion to stay or dismiss for forum non conveniens pursuant to Code of Civil Procedure sections 410.30 and 418.10 [citation], but a motion based on a forum selection clause is a special type of forum non conveniens motion. The factors that apply generally to a forum non conveniens motion do not control in a case involving a mandatory forum selection clause. [Citations.]” (Berg v. MTC Electronics Technologies (1998) 61 Cal.App.4th 349, 358 (Berg).)

    “If there is no mandatory forum selection clause, a forum non conveniens motion ‘requires the weighing of a gamut of factors of public and private convenience ….’ [Citation.] However if there is a mandatory forum selection clause, the test is simply whether application of the clause is unfair or unreasonable, and the clause is usually given effect. Claims that the previously chosen forum is unfair or inconvenient are generally rejected. [Citation.] A court will usually honor a mandatory forum selection clause without extensive analysis of factors relating to convenience. [Citation.]” (Berg, supra, 61 Cal.App.4th at pp. 358-59.)

    Defendants contend this action is subject to a forum selection clause found in several written agreements signed by plaintiff Douglass. Defendants point first to the Incentive Stock Option Agreement (“Option Agreement”) which incorporates the terms and conditions of the Servicemesh Inc. 2011 Equity Incentive Plan (“Equity Plan”). (See Exhs. A – B of the Declaration of William L. Deckelman, Jr. in Support, etc. (“Declaration Deckelman”).)

    Section 4(q) of the Equity Plan states, in relevant part, “Unless otherwise provided in the Award Agreement, recipients of an Award under the Plan are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Delaware to resolve any and all issues that may arise out of or relate to the Plan or any related Award Agreement.”

    When defendant CSC purchased defendant Servicemesh, they entered into an Equity Purchase Agreement (“EPA”) which included the following relevant provision, “All litigation relating to or arising under or in connection with this Agreement or any of the Related Agreements shall be brought in a United Stated District Court or a state court located in the State of Delaware, which shall have exclusive jurisdiction to resolve any disputes related to or arising under this Agreement or the Related Agreements, with each party irrevocably consenting to the jurisdiction thereof for any actions, suits or proceedings arising out of or relating this Agreement or the Related Agreements.” (See Exh. C to the Declaration Deckelman.)

    The term “Related Agreements” is defined by the EPA to include “the Escrow Agreement, the FIRPTA Certification, the IRS Notice, the Purchase Right Termination Agreement, Retention Agreements, Non-Disclosure and Non-Solicitation Agreements, Letters of Transmittal and the Stockholder Addendums.” (See Exh. C to the Declaration Deckelman.) “Retention Agreement” is defined by the EPA to have the meaning set forth in Section 8.2(n) which, in turn, states, in relevant part, “Each employee of [Servicemesh, including plaintiff Douglass] shall (i) have delivered an executed retention agreement, substantially in the form of Exhibit H, providing for the grant of certain restricted stock units with a grant date of the Closing Date (each, a “Retention Agreement”), but with the terms particular to such individual, to [CSC] and (ii) shall not have given [Servicemesh] notice of their intent to terminate their employment with [Servicemesh].” (See Exh. C to the Declaration Deckelman.)

    Defendants also direct the court to a Letter of Transmittal signed by plaintiff wherein it states, “All litigation arising under of in connection with this Letter of Transmittal, the Purchase Agreement or any of the Related Agreements shall be brought only in a United Stated District Court or a state court located in the state of Delaware, which shall have exclusive jurisdiction to resolve any disputes relating or arising under this Letter of Transmittal, the Purchase Agreement or any of the Related Agreements, with each Party irrevocably consenting to the exclusive jurisdiction thereof for any actions, suits or proceedings arising out of or relating to this Letter of Transmittal, the Purchase Agreement or any of the Related Agreements.” (See Exh. D to the Declaration Deckelman.)

    Defendants contend this court should give effect to the contractually agreed upon mandatory forum selection clauses identified above. Although defendants include a copy of the Retention Agreement in connection with their motion to dismiss, defendants (significantly) do not refer to the forum selection clause from the Retention Agreement.

    In opposition, plaintiff Douglass points out a conflict between the (mandatory) forum selection clauses identified above and the (non-mandatory) forum selection clause found in the Retention Agreement. The Retention Agreement states, in relevant part, “Any party bringing a legal action or proceeding against any other party arising out of or relating to this Agreement may bring the legal action or proceeding in the United States District Court for the Eastern District of Virginia, Alexandria Division or in any court of the Commonwealth of Virginia, sitting in Fairfax County.” (See Exh. E to the Declaration Deckelman; emphasis added.) Furthermore, the Retention Agreement states, in part, “Each party to this Agreement submits to the nonexclusive jurisdiction of the courts specified [in the forum selection clause]… .” (Id.; emphasis added.)

    By defendants’ own admission, the Retention Agreement includes an integration clause which states, “This Agreement (along with the RSU Award Agreement and the Employment Documents that you are required to sign on the Transaction Closing Date) sets forth the entire understanding of you and [CSC] with regard to the RSU Retention Grant, and supersedes all prior agreements and communications, whether oral or written, between you and [CSC] or its affiliates with respect thereto.” (Id.)

    The Retention Agreement submitted by defendants is dated November 12, 2013 and would appear to be the last signed agreement in the group of agreements submitted by the defendants. As such, the Retention Agreement, by its own terms, “supersedes all prior agreements and communications.” Consequently, defendants have not met their burden of demonstrating the existence of a binding mandatory forum selection clause. Defendants’ motion to dismiss for forum non conveniens is DENIED.

    II. Defendants CSC and Servicemesh’s demurrer is SUSTAINED, in part, and OVERRULED, in part.

    A. Defendants CSC and Servicemesh’s demurrer to the first cause of action [breach of oral contract] is OVERRULED.

    “The statement of a cause of action for breach of contract requires a pleading of (a) the contract; (b) plaintiff’s performance or excuse for nonperformance; (c) defendant’s breach; and (d) damage to plaintiff.” (4 Witkin, California Procedure (4th ed. 1997) Pleading, §482, p. 574; Roth v. Malson (1998) 67 Cal.App.4th 552, 557.) Here, plaintiff Douglass alleges Defendants CSC and Servicemesh and their “representatives reiterated and assured Plaintiff that they would make Plaintiff whole on his canceled stock options and that post-closing of the acquisition that CSC would provide additional compensation and/or restricted stock units in exchange for plaintiff agreeing to execute certain closing documents including a release of defendants.” (FAC, ¶36.)

    Defendant CSC [alone] demurs by arguing that neither it nor its representatives made any such promise(s) or assurance(s). According to defendant CSC, the alleged promises were made by defendant Servicemesh’s CEO, Pulier, and are not binding upon CSC. Defendant CSC contends generic allegations of agency are insufficient (see Moore v. Regents of University of California (1990) 51 Cal.3d 120, 134, fn. 12) and more specificity is required.

    At paragraph 22 of the FAC, plaintiff Douglass alleges, in relevant part, “Pulier stated that he was in communication with Sunita Holtzer (‘Holtzer’), Chief Human Resources Officer of CSC, about the executive compensation packages after the acquisition and that he would insure that plaintiff received compensation comparable to the value of the approximately 450,000 shares in the Company that were being eliminated in the acquisition. As Pulier announced he would continue to lead the Company after the acquisition, and knowing from the closing documents that CSC would assume all liabilities of the Company after the transaction, it was apparent to plaintiff that Pulier had both ostensible and actual authority to commit the Company and CSC to insure plaintiff was given compensation after the closing to compensate for the loss of his options and the change of control agreement. In addition, plaintiff was in contact with Dan Hushon, the CTO of CSC, who advised plaintiff he and CSC were aware of the amount of lost equity that Pulier promised to make up and that Hushon expected CSC to offer plaintiff compensation to include that lost equity.”

    Defendant CSC acknowledges these allegations asserting ostensible agency, but contend they are nevertheless insufficient to bind CSC for promises made by Pulier. Defendant CSC relies on J.L. v. Children’s Institute, Inc. (2009) 177 Cal.App.4th 388, 403 – 404 (J.L.) where the court wrote:

    “An agent is one who represents another, called the principal, in dealings with third persons.” (Civ.Code, § 2295.) “In California agency is either actual or ostensible. (Civ.Code, § 2298.) An agency is actual when the agent is really employed by the principal. (Civ.Code, § 2299.) An agency is ostensible when a principal causes a third person to believe another to be his agent, who is really not employed by him. (Civ.Code, § 2300.) [¶] An agent has the authority that the principal, actually or ostensibly, confers upon him. (Civ.Code, § 2315.)…. Ostensible authority … is the authority of the agent which the principal causes or allows a third person to believe that the agent possesses. (Civ.Code, § 2317.)” (Van Den Eikhof v. Hocker (1978) 87 Cal.App.3d 900, 905, 151 Cal.Rptr. 456.)

    Before recovery can be had against the principal for the acts of an ostensible agent, three requirements must be met: The person dealing with an agent must do so with a reasonable belief in the agent’s authority, such belief must be generated by some act or neglect by the principal sought to be charged and the person relying on the agent’s apparent authority must not be negligent in holding that belief. (Associated Creditors’ Agency v. Davis (1975) 13 Cal.3d 374, 399, 118 Cal.Rptr. 772, 530 P.2d 1084; Hill v. Citizens Nat. Trust & Sav. Bk. (1937) 9 Cal.2d 172, 175–176, 69 P.2d 853.) Ostensible agency cannot be established by the representations or conduct of the purported agent; the statements or acts of the principal must be such as to cause the belief the agency exists. (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1438, fn. 11, 29 Cal.Rptr.2d 746; Lee v. Helmco, Inc. (1962) 199 Cal.App.2d 820, 834, 19 Cal.Rptr. 413.) “ ‘Liability of the principal for the acts of an ostensible agent rests on the doctrine of “estoppel,” the essential elements of which are representations made by the principal, justifiable reliance by a third party, and a change of position from such reliance resulting in injury. [Citation.]’ [Citation.]” (Kaplan v. Coldwell Banker Residential Affiliates, Inc. (1997) 59 Cal.App.4th 741, 747, 69 Cal.Rptr.2d 640.)

    Defendant CSC acknowledges the sentence in paragraph 22 of the FAC where plaintiff Douglass alleges, “In addition, plaintiff was in contact with Dan Hushon, the CTO of CSC, who advised plaintiff he and CSC were aware of the amount of lost equity that Pulier promised to make up and that Hushon expected CSC to offer plaintiff compensation to include that lost equity.” Defendant CSC contends this single statement is insufficient because it does not constitute a promise or offer of any kind. Defendant CSC misunderstands the significance of this allegation. Plaintiff Douglass does not rely on any promise made by Hushon. Instead, the fact is asserted as an act of affirmance or ratification of Pulier’s statements. It is this court’s opinion that the allegations are sufficient to allege Pulier acted as an ostensible agent of CSC.

    As stated in J.L., there are three requirements in order to successfully assert ostensible agency. “The person dealing with an agent must do so with a reasonable belief in the agent’s authority, such belief must be generated by some act or neglect by the principal sought to be charged and the person relying on the agent’s apparent authority must not be negligent in holding that belief.” (J.L., supra, 177 Cal.App.4th at pp. 403 – 404.) Defendant CSC argues further that plaintiff Douglass could not hold a reasonable belief in Pulier’s authority and/or acted negligently in doing so because Pulier and CSC stood on opposite sides of a transaction. Defendant CSC contends it would be unreasonable, under such circumstances, for plaintiff Douglass to believe that Pulier had any authority to bind CSC.

    However, this issue cannot be decided on a demurrer. An agent’s ostensible “authority may be proved by circumstantial evidence [citations]; and it may likewise be implied from circumstances [citations].” (Gaine v. Austin (1943) 58 Cal.App.2d 250, 261.) “Whether ostensible agency exists ‘… is a question of fact.’ ” (Kaplan v. Coldwell Banker Residential Affiliates, Inc. (1997) 59 Cal.App.4th 741, 748; House Grain Co. v. Finerman & Sons (1953) 116 Cal.App.2d 485, 492 [question of ostensible agency is “one of fact”].)

    Next, defendant Servicemesh [alone] contends plaintiff Douglass has not sufficiently alleged what consideration he would receive from defendant Servicemesh. Where the contract is written, consideration is presumed. (See Civ. Code, §1614—“A written instrument is presumptive evidence of a consideration.”) However, the statutory presumption of consideration does not apply to an oral contract. “In an action on an oral agreement, the essential element of consideration must normally be alleged.” (See 4 Witkin, California Procedure (5th ed. 2010) Pleading, §525 citing Acheson v. Western Union Tel. Co. (1892) 96 Cal. 641, 644.) Defendant Servicemesh points to the allegation at paragraph 36 where it is alleged, “post-closing of the acquisition, … CSC would provide additional compensation and/or restricted stock units in exchange for plaintiff agreeing to execute certain closing documents including a release of defendants.” (FAC, ¶36.) The consideration being offered by Servicemesh [additional compensation and/or restricted stock units, presumably from CSC] is of post-acquisition property. Defendant Servicemesh cites no authority, and this court is aware of none, that a company cannot offer consideration that it will obtain in the future or consideration (belonging to another [CSC]) if acting as an agent for the other.

    Next, defendants CSC and Servicemesh argue plaintiff has not, himself, alleged adequate consideration. Defendants CSC and Servicemesh point again to paragraph 36, but fail to discuss the allegation that plaintiff agreed to “execute certain closing documents including a release of defendants.” Although the FAC does not explicitly identify what the “certain closing documents” are, defendants contend the closing document is the Equity Purchase Agreement. Defendants CSC and Servicemesh continue by arguing that the alleged oral promise here is a modification of the Equity Purchase Agreement and the modification is unsupported by additional compensation. (Civ. Code, § 1698—“Unless the contract otherwise expressly provides, a contract in writing may be modified by an oral agreement supported by new consideration.”) However, defendants’ assumption that the oral promise is a modification of the Equity Purchase Agreement is not supported by the allegations of the FAC. The only closing document specifically referenced in the FAC is a “280G disclosure document.” (See FAC, ¶20 – 22.)

    Finally, defendants argue the alleged promise from Pulier of a “ ‘big offer’ from CSC … to make up for the loss” (see FAC, ¶21) is not sufficiently definite to be enforceable.

    “Under California law, a contract will be enforced if it is sufficiently definite (and this is a question of law) for the court to ascertain the parties’ obligations and to determine whether those obligations have been performed or breached.” [Citation.] “To be enforceable, a promise must be definite enough that a court can determine the scope of the duty[,] and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages.” [Citations.] “Where a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable.” [Citations.] “The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.” [Citations.] But “f … a supposed ‘contract’ does not provide a basis for determining what obligations the parties have agreed to, and hence does not make possible a determination of whether those agreed obligations have been breached, there is no contract.” [Citation.]

    (Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 209.)

    The court cannot state, as a matter of law, that the promise of a “big offer,” sufficient to counter the loss of plaintiff’s options is too indefinite to enforce. (See Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768—where court found sufficiently definite a promise that plaintiffs would be paid a bonus that would be sufficient for them to retire.”)

    For the above stated reasons, defendants CSC and Servicemesh’s demurrer to the first cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action
    for breach of oral contract is OVERRULED. B. Defendants CSC and Servicemesh’s demurrer to the third cause of action [breach of implied covenant of good faith and fair dealing] is OVERRULED. “Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” (Rest.2d Contracts, §205.) “There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.” (Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 658; see also CACI, No. 325.) However, there can be no implied covenant without an underlying contract. (See Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 36—“Absent that contractual right, however, the implied covenant has nothing upon which to act as a supplement, and ‘should not be endowed with an existence independent of its contractual underpinnings.’ [Citation.]”) Defendants CSC and Servicemesh demur to the breach of implied covenant third cause of action by arguing that it is derivative of the first cause of action and since the first cause of action fails, so too does the third cause of action. However, in light of the ruling above, defendants CSC and Servicemesh’s demurrer to the third cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for breach of implied covenant of good faith and fair dealing is OVERRULED. C. Defendants CSC and Servicemesh’s demurrer to the second cause of action [promissory estoppel] is OVERRULED. “The required elements for promissory estoppel in California are … (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) his reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” (Laks v. Coast Fed. Sav. & Loan Assn. (1976) 60 Cal.App.3d 885, 890; see also US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 903.) Defendants CSC and Servicemesh incorporate their earlier arguments concerning ostensible agency and indefiniteness. For the reasons stated above, the court is not persuaded by those arguments. Defendants CSC and Servicemesh demur additionally by arguing that plaintiff does not adequately allege detrimental reliance or causation. Defendants acknowledge the allegation that plaintiff executed documents which cancelled his Servicemesh stock options, but argue that such reliance was unreasonable because the Servicemesh Equity Plan gives Servicemesh the right to cancel plaintiff’s unvested stock options without consideration and without consent upon a change of control. Defendants’ argument overlooks the allegation that plaintiff not only executed documents which cancelled his stock options, but also alleges he executed “documents including a release of defendants.” (FAC, ¶36.) Defendants do not point to any allegations or judicially noticeable facts which would demonstrate plaintiff’s detrimental reliance (release of defendants’ liability) is unreasonable. Accordingly, defendants CSC and Servicemesh’s demurrer to the second cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for promissory estoppel is OVERRULED. D. Defendants CSC and Servicemesh’s demurrer to the fourth cause of action [intentional misrepresentation] is OVERRULED. “The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638 (Lazar); see also Philipson & Simon v. Gulsvig (2007) 154 Cal.App.4th 347, 363.) “Fraud actions are subject to strict requirements of particularity in pleading. … Accordingly, the rule is everywhere followed that fraud must be specifically pleaded.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) “The pleading should be sufficient to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” (Commonwealth Mortgage Assurance Co. v. Superior Court (1989) 211 Cal.App.3d 508, 518.) The Lazar court did not comment on how these particular allegations met the requirement of pleading with specificity in a fraud action, but the court did say that “this particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’ A plaintiff’s burden in asserting a claim against a corporate employer is even greater. In such a case, the plaintiff must ‘allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Lazar, supra, 12 Cal.4th at p. 645.) Defendants contend the FAC lacks sufficient particularity. Defendant CSC again repeats its argument regarding the agency allegations. For the reasons stated above, the court finds the agency allegations sufficient. Defendants also contend the allegations concerning knowledge of falsity are insufficient. “Intent, like knowledge, is a fact. Hence, the averment that the representation was made with the intent to deceive the plaintiff, or any other general allegation with similar purport, is sufficient.” (5 Witkin, California Procedure (4th ed. 1997) Pleading, §684, p. 143.) Defendants’ arguments concerning the reasonableness of plaintiffs’ reliance are also addressed above. Finally, defendants contend plaintiff has not alleged damage with enough particularity and apparently assert plaintiff has not suffered any damage because he was paid like every other shareholder. This assertion of extrinsic fact is not proper on demurrer. Accordingly, defendants CSC and Servicemesh’s demurrer to the fourth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for intentional misrepresentation is OVERRULED. E. Defendants CSC and Servicemesh’s demurrer to the fifth cause of action [negligent misrepresentation] is SUSTAINED. There cannot be, as a matter of law, a negligent promise to perform a future event. In Tarmann v. State Farm Mutual Automobile Ins. Co. (1991) 2 Cal.App.4th 153, 159, the court explained, “To maintain an action for deceit based on a false promise, one must specifically allege and prove, among other things, that the promisor did not intend to perform at the time he or she made the promise and that it was intended to deceive or induce the promisee to do or not do a particular thing. [Citations.] Given this requirement, an action based on a false promise is simply a type of intentional misrepresentation, i.e., actual fraud. [Footnote.] The specific intent requirement also precludes pleading a false promise claim as a negligent misrepresentation, i.e., ‘The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true.’ [Citation.] Simply put, making a promise with an honest but unreasonable intent to perform is wholly different from making one with no intent to perform and, therefore, does not constitute a false promise. Moreover, we decline to establish a new type of actionable deceit: the negligent false promise.” Here, plaintiff has alleged various false promises of future performance. Such promises can only be intentional. Accordingly, defendants CSC and Servicemesh’s demurrer to the fifth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for negligent misrepresentation is SUSTAINED WITHOUT LEAVE TO AMEND. F. Defendants CSC and Servicemesh’s demurrer to the sixth cause of action [unfair business practices] is OVERRULED. “Business and Professions Code section 17200 et seq. prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143 (Korea).) “The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea, supra, 29 Cal.4th at p. 1143.) “Section 17200 ‘borrows’ violations from other laws by making them independently actionable as unfair competitive practices. In addition, under section 17200, a practice may be deemed unfair even if not specifically proscribed by some other law.” (Id.) “By proscribing unlawful business practices, the UCL borrows violations of other laws and treats them as independently actionable. In addition, practices may be deemed unfair or deceptive even if not proscribed by some other law. Thus, there are three varieties of unfair competition: practices which are unlawful, or unfair, or fraudulent.” (Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 48.) In demurring, defendants argue plaintiff Douglass has not sufficiently asserted a claim for unlawful or unfair business practices. However, a violation of Business and Professions Code section 17200 can also be predicated on fraudulent conduct. Defendants have not demonstrated how the sixth cause of action fails to state a claim under the fraudulent prong of Business and Professions Code section 17200. Accordingly, defendants CSC and Servicemesh’s demurrer to the sixth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for unfair business practices is OVERRULED. G. Defendants CSC and Servicemesh’s demurrer to the seventh and eighth causes of action [unjust enrichment/ restitution] is OVERRULED. In Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793, the court wrote, “[T]here is no cause of action in California for unjust enrichment. “The phrase ‘Unjust Enrichment’ does not describe a theory of recovery, but an effect: the result of a failure to make restitution under circumstances where it is equitable to do so.” [Citations.] Unjust enrichment is “‘a general principle, underlying various legal doctrines and remedies,’ ” rather than a remedy itself. [Citation.] It is synonymous with restitution.” In McBride v. Houghton (2004) 123 Cal.App.4th 379 (McBride), the court wrote, “Unjust enrichment is not a cause of action, however, or even a remedy, but rather a general principle, underlying various legal doctrines and remedies. It is synonymous with restitution. Unjust enrichment has also been characterized as describing the result of a failure to make restitution. [¶] In reviewing a judgment of dismissal following the sustaining of a general demurrer, we ignore erroneous or confusing labels if the complaint pleads facts which would entitle the plaintiff to relief. Thus, we must look to the actual gravamen of [plaintiff’s] complaint to determine what cause of action, if any, he stated, or could have stated if given leave to amend. In accordance with this principle, we construe [plaintiff’s] purported cause of action for unjust enrichment as an attempt to plead a cause of action giving rise to a right to restitution.” There are several potential bases for a cause of action seeking restitution. For example, restitution may be awarded in lieu of breach of contract damages when the parties had an express contract, but it was procured by fraud or is unenforceable or ineffective for some reason. [Citations.] Alternatively, restitution may be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct. In such cases, the plaintiff may choose not to sue in tort, but instead to seek restitution on a quasi-contract theory (an election referred to at common law as “waiving the tort and suing in assumpsit”). [Citation.] In such cases, where appropriate, the law will imply a contract (or rather, a quasi-contract), without regard to the parties’ intent, in order to avoid unjust enrichment. [Citation.] (McBride, supra, 123 Cal.App.4th at pp. 387 – 388; internal citations and punctuation omitted.) Significantly, “there is no particular form of pleading necessary to invoke the doctrine of restitution.” (Dinosaur Development, Inc. v. White (1989) 216 Cal.App.3d 1310, 1315 [internal quotation marks omitted].) As the McBride court instructs, the court should overlook the labels given by the plaintiff and instead focus on whether there is a basis for restitution. In light of the rulings above, plaintiff has stated claims which would support a basis for restitution. Accordingly, defendants CSC and Servicemesh’s demurrer to the seventh and eighth causes of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for unjust enrichment and restitution, respectively, is OVERRULED. H. Defendants CSC and Servicemesh’s demurrer to the ninth cause of action [wrongful termination/ retaliation] is OVERRULED. In demurring to the ninth cause of action, defendants contend there exists no common law claim for retaliation and any such claim must be statutorily based. Defendants go on to cite Searcy v. Hemet Unified School Dist. (1986) 177 Cal.App.3d 792 (Searcy) for the proposition that where a claim is based on a statutory duty, the plaintiff must identify the statute. However, Searcy involved governmental tort liability. Defendants’ reliance on Searcy is misplaced since this case does not involve governmental or public entity liability. “[T]o state a cause of action against a public entity, every fact material to the existence of its statutory liability must be pleaded with particularity.” (Peter W. v. San Francisco Unified School District (1976) 60 Cal.App.3d 814, 819.) “In order to state a cause of action for government tort liability, ‘every fact essential to the existence of statutory liability must be pleaded with particularity, including the existence of a statutory duty. [Citation.] Duty cannot be alleged simply by stating, ‘defendant had a duty under the law’; that is a conclusion of law, not an allegation of fact. The facts showing the existence of the claimed duty must be alleged. [Citations.] Since the duty of a governmental agency can only be created by statute or ‘enactment,’ the statute or ‘enactment’ claimed to establish the duty must at the very least be identified.’ [Citation.]” (Zuniga v. Housing Authority of the City of Los Angeles (1995) 41 Cal.App.4th 82, 96.) Accordingly, defendants CSC and Servicemesh’s demurrer to the ninth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for wrongful termination/ retaliation is OVERRULED. I. Defendants CSC and Servicemesh’s demurrer to the tenth cause of action [failure to pay wages] is OVERRULED. Defendants argue simply that since plaintiff’s contract claims fail, so too does plaintiff’s claim for lost wages. In light of the rulings above, defendants CSC and Servicemesh’s demurrer to the tenth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for failure to pay wages is OVERRULED. J. Defendants CSC and Servicemesh’s demurrer to the eleventh cause of action [declaratory relief] is OVERRULED. Defendants demur to the declaratory relief eleventh cause of action on the basis that plaintiff seeks relief which directly contradict the express terms of the forum selection clause found in the Letter of Transmittal. For the same reasons discussed above in Section I, the court does not find defendants’ argument persuasive. Accordingly, defendants CSC and Servicemesh’s demurrer to the eleventh cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for declaratory relief is OVERRULED. III. Defendant Drake’s motion to dismiss for forum non conveniens is DENIED. For the same reasons discussed above, defendant Drake’s motion to dismiss for forum non conveniens is DENIED. IV. Defendant Drake’s demurrer is SUSTAINED, in part, and OVERRULED, in part. A. Defendant Drake’s demurrer to the fourth cause of action [intentional misrepresentation] is OVERRULED. Defendant Drake separately demurs to the fourth cause of action by arguing that the FAC does not plead with particularity any false representations by Drake. However, Drake acknowledges the allegation at paragraph 21 where it is stated, “Drake repeated Pulier’s statements about receiving an offer from CSC that would compensate him for his lost options.” This allegation is sufficient to incorporate the same misrepresentations attributed to Pulier in the same paragraph. Drake further argues the allegation lacks particularity concerning when, where, or how it was made. Lazar does not require an allegation of where a fraudulent statement was made. As to when, paragraphs 20 and 21, read in conjunction, state the representations were made early on the morning of October 28, 2013. As to how, a reasonable inference from the word “repeated,” is that they were directly spoken to plaintiff. The balance of defendant Drake’s arguments are essentially the same as those advanced by defendants CSC and Servicemesh. For the reasons previously stated, defendant Drake’s demurrer to the fourth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for intentional misrepresentation is OVERRULED. B. Defendant Drake’s demurrer to the fifth cause of action [negligent misrepresentation] is SUSTAINED. For the same reason stated above in connection with defendants CSC and Servicemesh’s demurrer to the fifth cause of action, defendant Drake’s demurrer to the fifth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for negligent misrepresentation is SUSTAINED WITHOUT LEAVE TO AMEND. C. Defendant Drake’s demurrer to the sixth cause of action [unfair business practices] is OVERRULED. For the same reasons stated above in connection with defendants CSC and Servicemesh’s demurrer to the sixth cause of action, defendant Drake’s demurrer to the sixth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for unfair business practices is OVERRULED. D. Defendant Drake’s demurrer to the seventh and eighth causes of action [unjust enrichment/ restitution] is OVERRULED. For the same reasons stated above in connection with defendants CSC and Servicemesh’s demurrer to the seventh and eighth causes of action, defendant Drake’s demurrer to the seventh and eighth causes of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for unjust enrichment and restitution, respectively, is OVERRULED. V. Defendant Boutros-Ghali’s joinder to the motions to dismiss for forum non conveniens is DENIED. For the same reasons discussed above, defendant Boutros-Ghali’s joinder in the motions to dismiss for forum non conveniens is DENIED. VI. Defendant Boutros-Ghali’s demurrer is SUSTAINED. Defendant Boutros-Ghali demurs to the fourth through eighth causes of action directed at him on the basis that, essentially, there are no allegations that he made any fraudulent statements and all the causes of action directed against him are predicated on the existence of such an allegation. Unlike defendant Drake, plaintiff can point to no allegation that defendant Boutros-Ghali repeated Pulier’s representations. In opposition, plaintiff can point only to paragraph 18 where it is alleged that defendant Boutros-Ghali “excluded Plaintiff [from the CSC acquisition process] knowing that [Servicemesh] was going to cancel the stock option plan and redistribute to Pulier, Drake and Boutros-Ghali the millions of dollars saved from the cancellation of Plaintiff’s stock.” Plaintiff also points to paragraph 27 where it is alleged defendant Boutros-Ghali “warned Plaintiff that if Plaintiff did not sign the closing documents or blocked the deal in any way, Plaintiff would be terminated by Pulier and left with nothing prior to closing.” Plaintiff tacitly admits these statements do not allege fraud by defendant Boutros-Ghali. Instead, plaintiff Douglass alludes to a “scheme” or “common plan” of fraud by Servicemesh officers, including defendant Boutros-Ghali. To the extent plaintiff Douglass is attempting to argue a conspiracy by defendant Boutros-Ghali with others, he has not adequately alleged conspiracy. Accordingly, defendant Boutros-Ghali’s demurrer to the fourth and sixth through eighth causes of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] is SUSTAINED with 10 days’ leave to amend. For the same reasons stated above, defendant Boutros-Ghali’s demurrer to the fifth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for negligent misrepresentation is SUSTAINED WITHOUT LEAVE TO AMEND.[Code Civ. Proc., §430.10, subd. (e)] for breach of oral contract is OVERRULED.

    B. Defendants CSC and Servicemesh’s demurrer to the third cause of action [breach of implied covenant of good faith and fair dealing] is OVERRULED.

    “Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” (Rest.2d Contracts, §205.) “There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.” (Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 658; see also CACI, No. 325.) However, there can be no implied covenant without an underlying contract. (See Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 36—“Absent that contractual right, however, the implied covenant has nothing upon which to act as a supplement, and ‘should not be endowed with an existence independent of its contractual underpinnings.’ [Citation.]”)

    Defendants CSC and Servicemesh demur to the breach of implied covenant third cause of action by arguing that it is derivative of the first cause of action and since the first cause of action fails, so too does the third cause of action. However, in light of the ruling above, defendants CSC and Servicemesh’s demurrer to the third cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action for breach of implied covenant of good faith and fair dealing is OVERRULED. C. Defendants CSC and Servicemesh’s demurrer to the second cause of action [promissory estoppel] is OVERRULED. “The required elements for promissory estoppel in California are … (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) his reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” (Laks v. Coast Fed. Sav. & Loan Assn. (1976) 60 Cal.App.3d 885, 890; see also US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 903.) Defendants CSC and Servicemesh incorporate their earlier arguments concerning ostensible agency and indefiniteness. For the reasons stated above, the court is not persuaded by those arguments. Defendants CSC and Servicemesh demur additionally by arguing that plaintiff does not adequately allege detrimental reliance or causation. Defendants acknowledge the allegation that plaintiff executed documents which cancelled his Servicemesh stock options, but argue that such reliance was unreasonable because the Servicemesh Equity Plan gives Servicemesh the right to cancel plaintiff’s unvested stock options without consideration and without consent upon a change of control. Defendants’ argument overlooks the allegation that plaintiff not only executed documents which cancelled his stock options, but also alleges he executed “documents including a release of defendants.” (FAC, ¶36.) Defendants do not point to any allegations or judicially noticeable facts which would demonstrate plaintiff’s detrimental reliance (release of defendants’ liability) is unreasonable. Accordingly, defendants CSC and Servicemesh’s demurrer to the second cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for promissory estoppel is OVERRULED. D. Defendants CSC and Servicemesh’s demurrer to the fourth cause of action [intentional misrepresentation] is OVERRULED. “The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638 (Lazar); see also Philipson & Simon v. Gulsvig (2007) 154 Cal.App.4th 347, 363.) “Fraud actions are subject to strict requirements of particularity in pleading. … Accordingly, the rule is everywhere followed that fraud must be specifically pleaded.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) “The pleading should be sufficient to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” (Commonwealth Mortgage Assurance Co. v. Superior Court (1989) 211 Cal.App.3d 508, 518.) The Lazar court did not comment on how these particular allegations met the requirement of pleading with specificity in a fraud action, but the court did say that “this particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’ A plaintiff’s burden in asserting a claim against a corporate employer is even greater. In such a case, the plaintiff must ‘allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Lazar, supra, 12 Cal.4th at p. 645.) Defendants contend the FAC lacks sufficient particularity. Defendant CSC again repeats its argument regarding the agency allegations. For the reasons stated above, the court finds the agency allegations sufficient. Defendants also contend the allegations concerning knowledge of falsity are insufficient. “Intent, like knowledge, is a fact. Hence, the averment that the representation was made with the intent to deceive the plaintiff, or any other general allegation with similar purport, is sufficient.” (5 Witkin, California Procedure (4th ed. 1997) Pleading, §684, p. 143.) Defendants’ arguments concerning the reasonableness of plaintiffs’ reliance are also addressed above. Finally, defendants contend plaintiff has not alleged damage with enough particularity and apparently assert plaintiff has not suffered any damage because he was paid like every other shareholder. This assertion of extrinsic fact is not proper on demurrer. Accordingly, defendants CSC and Servicemesh’s demurrer to the fourth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for intentional misrepresentation is OVERRULED. E. Defendants CSC and Servicemesh’s demurrer to the fifth cause of action [negligent misrepresentation] is SUSTAINED. There cannot be, as a matter of law, a negligent promise to perform a future event. In Tarmann v. State Farm Mutual Automobile Ins. Co. (1991) 2 Cal.App.4th 153, 159, the court explained, “To maintain an action for deceit based on a false promise, one must specifically allege and prove, among other things, that the promisor did not intend to perform at the time he or she made the promise and that it was intended to deceive or induce the promisee to do or not do a particular thing. [Citations.] Given this requirement, an action based on a false promise is simply a type of intentional misrepresentation, i.e., actual fraud. [Footnote.] The specific intent requirement also precludes pleading a false promise claim as a negligent misrepresentation, i.e., ‘The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true.’ [Citation.] Simply put, making a promise with an honest but unreasonable intent to perform is wholly different from making one with no intent to perform and, therefore, does not constitute a false promise. Moreover, we decline to establish a new type of actionable deceit: the negligent false promise.” Here, plaintiff has alleged various false promises of future performance. Such promises can only be intentional. Accordingly, defendants CSC and Servicemesh’s demurrer to the fifth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for negligent misrepresentation is SUSTAINED WITHOUT LEAVE TO AMEND. F. Defendants CSC and Servicemesh’s demurrer to the sixth cause of action [unfair business practices] is OVERRULED. “Business and Professions Code section 17200 et seq. prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143 (Korea).) “The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea, supra, 29 Cal.4th at p. 1143.) “Section 17200 ‘borrows’ violations from other laws by making them independently actionable as unfair competitive practices. In addition, under section 17200, a practice may be deemed unfair even if not specifically proscribed by some other law.” (Id.) “By proscribing unlawful business practices, the UCL borrows violations of other laws and treats them as independently actionable. In addition, practices may be deemed unfair or deceptive even if not proscribed by some other law. Thus, there are three varieties of unfair competition: practices which are unlawful, or unfair, or fraudulent.” (Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 48.) In demurring, defendants argue plaintiff Douglass has not sufficiently asserted a claim for unlawful or unfair business practices. However, a violation of Business and Professions Code section 17200 can also be predicated on fraudulent conduct. Defendants have not demonstrated how the sixth cause of action fails to state a claim under the fraudulent prong of Business and Professions Code section 17200. Accordingly, defendants CSC and Servicemesh’s demurrer to the sixth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for unfair business practices is OVERRULED. G. Defendants CSC and Servicemesh’s demurrer to the seventh and eighth causes of action [unjust enrichment/ restitution] is OVERRULED. In Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793, the court wrote, “[T]here is no cause of action in California for unjust enrichment. “The phrase ‘Unjust Enrichment’ does not describe a theory of recovery, but an effect: the result of a failure to make restitution under circumstances where it is equitable to do so.” [Citations.] Unjust enrichment is “‘a general principle, underlying various legal doctrines and remedies,’ ” rather than a remedy itself. [Citation.] It is synonymous with restitution.” In McBride v. Houghton (2004) 123 Cal.App.4th 379 (McBride), the court wrote, “Unjust enrichment is not a cause of action, however, or even a remedy, but rather a general principle, underlying various legal doctrines and remedies. It is synonymous with restitution. Unjust enrichment has also been characterized as describing the result of a failure to make restitution. [¶] In reviewing a judgment of dismissal following the sustaining of a general demurrer, we ignore erroneous or confusing labels if the complaint pleads facts which would entitle the plaintiff to relief. Thus, we must look to the actual gravamen of [plaintiff’s] complaint to determine what cause of action, if any, he stated, or could have stated if given leave to amend. In accordance with this principle, we construe [plaintiff’s] purported cause of action for unjust enrichment as an attempt to plead a cause of action giving rise to a right to restitution.” There are several potential bases for a cause of action seeking restitution. For example, restitution may be awarded in lieu of breach of contract damages when the parties had an express contract, but it was procured by fraud or is unenforceable or ineffective for some reason. [Citations.] Alternatively, restitution may be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct. In such cases, the plaintiff may choose not to sue in tort, but instead to seek restitution on a quasi-contract theory (an election referred to at common law as “waiving the tort and suing in assumpsit”). [Citation.] In such cases, where appropriate, the law will imply a contract (or rather, a quasi-contract), without regard to the parties’ intent, in order to avoid unjust enrichment. [Citation.] (McBride, supra, 123 Cal.App.4th at pp. 387 – 388; internal citations and punctuation omitted.) Significantly, “there is no particular form of pleading necessary to invoke the doctrine of restitution.” (Dinosaur Development, Inc. v. White (1989) 216 Cal.App.3d 1310, 1315 [internal quotation marks omitted].) As the McBride court instructs, the court should overlook the labels given by the plaintiff and instead focus on whether there is a basis for restitution. In light of the rulings above, plaintiff has stated claims which would support a basis for restitution. Accordingly, defendants CSC and Servicemesh’s demurrer to the seventh and eighth causes of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for unjust enrichment and restitution, respectively, is OVERRULED. H. Defendants CSC and Servicemesh’s demurr
    3 weeks ago
  • Good news from Derryn Hinch's Justice Party -

    Australian paedophiles will have their passports cancelled under strict new laws to be unveiled by the Turnbull government.

    The changes follow high-profile cases of child exploitation in south-east Asia and fervent campaigning by anti-paedophile senator Derryn Hinch.

    "It would be the best thing I've achieved in my time here," he told Fairfax Media, labelling the trips taken offenders - particularly to nearby Asian countries - "child rape holidays".

    Read More...
    4 weeks ago
  • Charles Ponzi created a new topic ' FOS update from denise' in the forum.
    BFCSA: The demolition of FOS and CIO is now on! Major Banks want ONE JUMBO AFCA to handle complaints. Our stupidly dumbo Prime Minister fails to understand you have the ROYAL COMMISSION FIRST. Then, if you are sensible, you create a Government controlled Federal Consumer Protection Bureau, to enable consumers to hold the Government to Account. The Prof. Ian Ramsay Report will be pure farce, influenced by the dumbo's at ASIC.

    CONSUMER COMPLAINTS mainly against the Major banks have been mishandled by the corrupt EDR for two decades. Now, CIO calls for ROYAL COMMISSION INTO THE BANKS!!!!

    Please LIKE our BFCSA PAGE the top of the page. Please SHARE and even support our work via donations to assist our campaign or JOIN us today - details re membership button and donations on our website. www.bfcsa.com.au

    Six industry associations, representing four out of every five financial services firms, have jointly condemned the federal government's plan to create the Australian Financial Complaints Authority, warning it won't be trusted by smaller players who are angry they weren't properly heard during the consultation process and don't want to subsidise a scheme that will be designed to accommodate the big banks.

    Fighting back, CIO claims the new "AFCA will not be equipped to weed out poor corporate culture, call out moral obloquy or fix embedded organisational cultures," Mr Venga said. "Only a royal commission can do this."

    Read much more...........................
    www.bfcsa.com.au/…/bfcsa-the-demolition-of-fos-and-c…

    Read More...
    1 month ago
  • www.abc.net.au/news/2017-05-26/labor-cal...o-disabilities/85605
    Federal Labor calls for royal commission into institutional abuse of people with a disability
    By political reporter Alexandra Beech

    Updated about an hour ago
    Related Story: Group homes for people with a disability 'must be phased out to stop abuse'
    Related Story: Group home 'hell': Open letter calls for inquiry into abuse of people with disabilities
    Related Story: Royal commission into alleged abuse of people with disabilities ditched
    Related Story: Calls for royal commission into institutional abuse of people with disability
    Map: Australia

    Federal Labor is calling for a royal commission into the abuse of people with a disability.
    Key points:

    Rights groups back Federal Labor's call to tackle epidemic
    A royal commission would "open the doors" to closed-off institutional environments
    Shadow disability minister calls for bipartisan support

    It comes after a Senate inquiry recommended establishing a royal commission into the disability sector in November 2015.

    The co-chief executive of People With Disability Australia, Matthew Bowden, has welcomed Labor's announcement, saying violence against people with a disability was at "epidemic levels".

    "It's happening in all environments where people with disability are; it's happening in every single jurisdiction," Mr Bowden said.

    He said a royal commission could help uncover the abuse of people in more closed-off environments.

    "Some of the people who are at great risk are at great risk because of the environment they're in," he said.

    "So people in psychiatric facilities, people with disabilities in juvenile justice centres, in prisons, in group homes.

    "They're hard to reach because their environments don't allow them to have freedom of association with people; service providers have a great deal of control and power in those people's lives and so reaching them can be difficult.

    "But this is where a royal commission would be able to compel the doors to be flung open and a spotlight to be shone in those very hard-to-reach places."
    Women particularly at risk

    The chief executive of Women With Disabilities Australia, Carolyn Frohmader, said she dealt with reports of violence every day and the problem appeared to be getting worse.

    "The ones that we see on television, on Four Corners, Lateline, media reports, they're just the ones we know about," she said.
    Locked away in suburbia

    A hundred years ago people with an intellectual disability were locked up in "lunatic asylums". Today they're still locked away, but it's just behind the walls of suburbia, writes Alison Branley.

    "That's the tip of the iceberg."

    Ms Frohmader said it was crucial that the royal commission focused in particular on the abuse suffered by women with a disability.

    "We know anyway the terrible statistics in the Australian context around violence against women generally, but if you add the layer of disability on top of that the evidence the statistics are horrific," she said.

    "Women with disability experience domestic violence at a rate of 40 per cent higher than women without disability.

    "And we know that women and girls with disability in institutional settings are targeted and experience profound and horrific forms of violence."

    She said issues such as forced contraception, abortion and sterilisation would also need to be addressed.
    Call for bipartisan support

    Both the Federal Government and the Opposition voted against setting up a royal commission when the Greens called for the move earlier this year.

    The Greens' motion was in response to allegations of abuse in institutional care raised by the ABC's Four Corners program.
    Inquiry hears horror stories

    The disability advocacy group Bolshy Divas told the 2015 inquiry accountability was lacking in the system and abuse cases went nowhere.

    Shadow disability minister Carol Brown said further cases had come to light since then.

    She said the issue could not be ignored.

    "We've also had organisations that have been calling for a royal commission, we've also had more than a hundred Australian academics sign a letter to the prime minister arguing the need," Senator Brown said.

    "So there's been added voices to the call for a royal commission and the government is not listening."

    But she said she remained hopeful there would soon bipartisan support and the Turnbull Government would establish the public inquiry.

    Senator Brown said that would allow victims, families and carers to have their voices heard at the "highest possible level".

    "A royal commission can compel witnesses, they take evidence and testimony where other forms of inquiries cannot and it's able to make recommendations and findings fully independent of all other levels of government and the non-government sector," she said.


    Read More...
    1 month ago
  • Clinton campaign boss John Podesta paid by Adani-fight foundation
    Hillary Clinton’s campaign chairman John Podesta in Washington.

    The Australian
    12:00AM November 3, 2016
    Save
    Share on Facebook
    Share on Twitter
    Share on email
    Share more...
    5
    Dennis Shanahan
    Political Editor
    Canberra

    Hillary Clinton’s presidential campaign chairman was being paid $US7000 a month by the US foundation funding efforts to stop the $16 billion Adani coal project in Queensland at the same time as he was being briefed on the anti-coal campaign in Australia.

    The San Francisco-based Sandler Foundation started paying John Podesta after he switched from being Barack Obama’s counsellor to Mrs Clinton’s campaign chairman in February last year, and has been seeking his assistance for anti-coal actions in India and Australia.

    Mr Podesta’s payments have been revealed in the latest batch of his emails released by WikiLeaks. He has refused to confirm the payments, but the Sandler Foundation, which also funds the Sunrise Project, the Australian-based leader of the campaign against the Adani coal project, has verified the emails and said it would “pay much more” for Mr Podesta’s advice. Earlier email dumps by WikiLeaks confirmed that Sunrise was leading a foreign-funded, highly orchestrated group of Australian activists working to stop the Adani coalmine, which it is claimed will create 10,000 jobs, by influencing indigenous land owners and environmental legal challenges.

    In a celebratory email to the Sandler Foundation in August last year after a decision against the Adani mine, Sunrise director John Hepburn, a former Greenpeace activist and one of the authors of a strategy to block coalmining in Australia, thanks the foundation. “Without your support, none of this would have happened,” he said.

    Those emails also revealed that in May last year Mr Podesta was being briefed on attempts by Sandler Foundation-funded groups to protect their tax-exempt charity status and hide the identity of their foreign donors from the Australian parliament.

    Mr Podesta also offered to help Greenpeace in India, which was also involved in a fight for charity status as it campaigned against the Indian Adani corporation.

    Herb Sandler founded the Sandler Foundation after selling a family owned bank, World Savings, just before the global financial crisis. Mr Sandler, and his late wife Marion, sold the bank for $US25 billion, making a personal profit of almost $US3bn.

    Mr Sandler and Mr Podesta are close friends. The Sandler family has given $4.4 million to the Clinton campaign because they “care about people and not billionaires”.

    The Turnbull government has accused a “cabal of individuals and overseas activists” of trying to prevent jobs being created in Queensland. Federal Resources Minister Matt Canavan has said that the foreign-funded groups “don’t live here, they don’t understand the region, and they’re trying to ­corrupt our judicial system and our political system for their own ends”.

    Senator Canavan has called for foreign-funded groups to be forced to disclose their income.

    The Adani mine development, which it is claimed will help provide cheap electric power to tens of millions of poor Indians, has been delayed for at least seven years by various legal challenges, including against a rail line to the coast and the development of a port at Abbot Point.

    Yesterday, GetUp!, one of the groups named in the Podesta emails fighting the Adani mine, said Senator Canavan attacked its “one million members rather than engage positively with the push to get the influence of ‘Big Money’ out of politics”. Paul Oosting, ­national director of GetUp!, said Senator Canavan was “too busy defending the interests of major Liberal National Party donors, like Adani, to try and reform the current broken situation”.

    Read More...
    2 months ago
  • time.com/4546768/bill-clinton-inc-memo-r...ess-charitable-ties/
    Massimo Calabresi
    Oct 27, 2016

    A 2011 memo made public Wednesday by Wikileaks revealed new details of how former President Bill Clinton made tens of millions of dollars for himself and his wife, then Secretary of State Hillary Clinton, through an opaque, ethically messy amalgam of philanthropic, business and personal activities.

    The memo was written by Bill Clinton’s longtime aide, Doug Band, and is among tens of thousands of emails apparently stolen from Hillary Clinton’s campaign chief, John Podesta, in what U.S. officials believe is part of a massive Russian-backed attempt to disrupt the U.S. election.

    The Band memo came in response to an investigation undertaken by a law firm, Simpson Thacher & Bartlett, into the activities of the Clinton Foundation at the behest of its board. The board was concerned that some of the activities undertaken by Band and others on behalf of the President could threaten the Foundation’s IRS status as a charity, according to Band’s memo. Chelsea Clinton had also reported concerns to Podesta and other Clinton advisors that Band and his recently-launched consulting firm, Teneo, were using her father’s name without his knowledge to contact British lawmakers for clients, including Dow Chemical.

    In the 12-page memo, Band describes how he and several colleagues spent much of the years after Bill Clinton’s presidency working to fund the Clinton Foundation, which has raised nearly $2 billion from individuals, corporations and governments for charities focusing on climate change, economic development, health, women and girls issues and other causes. Band claims in the memo that from 2006 to 2011, he and a colleague, Justin Cooper, raised $46 million for the Foundation through the Clinton Global Initiative, an annual networking conference that is one of the Foundation's big sources of income.
    Related
    President Donald Trump Holds Kentucky Rally
    White House
    How Difficult Would It Be to Impeach President Trump?

    But the Foundation work was just a part of what Bill Clinton did during his wife’s time as a Senator and Secretary of State, and it wasn’t always clear where the former president's non-profit activities ended and his for-profit ones began. Five months before he wrote the memo, Band joined forces with a recently retired State Department envoy, Declan Kelly, to form Teneo, which Band said provided merchant and investment banking services, corporate restructuring, public relations and communications services and strategic advising services to 20 clients, including Coca-Cola, Dow Chemical, UBS, Barclays and BHP Billiton, among others. Over that period, Band says in the memo, Teneo raised $8 million for the Clinton Foundation.

    And Band was also organizing personal income directly for Clinton. Under the heading, “For-Profit Activity of President Clinton (i.e. Bill Clinton, Inc.),” Band wrote, “We have dedicated our selves to helping the President secure and engage in for-profit activities—including speeches, books, and advisory service engagements... In support of the President’s for-profit activity, we also have solicited and obtained, as appropriate, in-kind services for the President and his family—for personal travel, hospitality, vacation and the like. Neither Justin nor I are separately compensated for these activities (e.g., we do not receive a fee for, or percentage of, the more than $50 million in for-profit activity we have personally helped to secure for President Clinton to date or the $66 million in future contracts, should he choose to continue with those engagements).”

    Band mentions four such “arrangements” without naming them. Bill Clinton was paid nearly $18 million to be “honorary chancellor” of a for-profit college, Laureate International Universities, according to reports and the family's tax returns. A Dubai-based firm, GEMS Education, paid Bill Clinton more than $560,000 in 2015, according to the tax returns. Band also lists a variety of speaking fees, previously disclosed by the Clintons, including hundreds of thousands of dollars each from UBS, Ericsson, BHP and Barclays. In 2011 alone, according to the Clinton’s tax returns, Bill Clinton earned $13,454,000 in speaking fees.

    No evidence has been found to support allegations of a quid pro quo of official acts by Hillary Clinton as senator or Secretary of State in exchange for the money received by the Clintons or the Clinton Foundation. However the messiness and opacity of the relationship between Clinton’s personal, business and philanthropic undertakings detailed in the memo raises new questions about Bill Clinton's activity. In the email to which Band's draft memo was attached, Band tells Podesta he has removed the "lasry section all together." Marc Lasry is a hedge fund manager and Clinton donor who funded an unsuccessful investment vehicle launched by Chelsea Clinton's husband Marc Mezvinsky.

    Other questions arise in the penultimate paragraph of the memo, entitled “Other Matters.” Without providing details, Band writes that since the end of Bill Clinton’s presidency he and Cooper had served as the primary contact and point of management for President Clinton's activities, including political, business and Foundation matters, speeches, books, and family/personal needs, including “securing in-kind private airplane travel, in-kind vacation stays, and supporting family business and personal needs.”

    Calls and emails to Band, Teneo and the Clinton Foundation were not immediately returned. The Hillary Clinton campaign declined to confirm that the memo, or other emails released by Wikileaks, are in fact undoctored documents stolen from Podesta’s personal email account. However a campaign spokesperson, Glen Caplin, tweeted on Wednesday that Wikileaks was advancing a “clear political agenda” by “dribbling out” Podesta’s emails. “If Podesta dump was about high-minded transparency @wikileaks would release all at once,” Carlin tweeted.

    Podesta has said he is cooperating with the FBI in an investigation of the hack. The Clinton Foundation has said it will stop accepting foreign and corporate donations if Hillary Clinton is elected president.

    Read More...
    2 months ago
  • Charles Ponzi created a new topic ' US Secret Service snatches hacker' in the forum.
    Excellent. USA Secret Service 'snatch' Russian from a non -extradition country. It can happen.

    www.documentcloud.org/documents/3673513-...Sentencing-Memo.html

    Read More...
    2 months ago
  • Charles Ponzi created a new topic ' Extradition to USA of boiler room scammers' in the forum.
    500 boiler room scammers of the elderly are set to be extradited for trial in the USA for fleecing 80 Americans.

    www.stlucianewsonline.com/caribbean-us-p...scammers-in-jamaica/

    Read More...
    2 months ago
  • Writes Michael Smith News: These emails from the ABC tell the story of its refusal to report on Gillard and the AWU Scandal
    Wednesday, 05 April 2017

    Julia-gillard-bruce-wilson

    Last Friday I wrote about 4 Corners and its Pauline Hanson expose - here's a recap:

    4Corners is a very expensive national asset. It's not the plaything of the ABC's staff collective.

    The promo (for the Pauline Hanson expose) could equally have been written featuring Bob Kernohan and others in 2012 regarding Gillard and her secretive deals with the AWU.
    I know that 4Corners people set to work on a story regarding Gillard and the AWU Scandal in late 2012.

    I know people like Bob Kernohan were spoken to.

    In the end, the story of the prime minister who was under police investigation for fraud was canned.

    And as the ABC decided to drop the story on Gillard, Gillard gave them an extra $190M of our money.


    On Monday 19 November 2012 Jonathon Holmes in his Media Watch program nailed the issues - and confirmed discussions I'd had with him and the 4 Corners program.

    EPISODE 41, 19 NOVEMBER 2012
    News values, priorities and politics

    Has the ABC gone missing in action on a story that might bring down the Prime Minister? Or is it treating the story on its merits?

    .........the story is not going away. And my bet is that the ABC’s investigative programs can’t, and won’t, ignore it for much longer.



    I don't know how many people contacted the ABC calling for 4 Corners to devote a program to Pauline Hanson.

    I doubt it was as many as wrote asking for it to devote time and resources to The AWU Scandal.

    In October 2012 one of our readers complained about the lack of coverage.

    On 23 October 2012 the ABC's Canberra based news editor made this incredible reply - read it in the context of the time, resources and promotion given to the Hanson piece.

    From: John Mulhall <This email address is being protected from spambots. You need JavaScript enabled to view it.>

    To:

    Sent: Tuesday, 23 October 2012 2:08 PM

    Subject: ABC News query



    Dear Mr,

    Thank you for your email regarding Mr Blewitt's statements. The ABC is aware of these statements but we do not at this stage believe it warrants the attention of our news coverage.

    To the extent that it may touch tangentially on a former role of the Prime Minister, we know The Australian newspaper maintains an abiding interest in events 17 years ago at the law firm Slater and Gordon, but the ABC is unaware of any allegation in the public domain which goes to the Prime Minister's integrity. If indeed Ms Gillard has had questions to answer, ABC News reported those answers from her lengthy media conference of 24/8/12 in which she exhausted all questions on the issue.

    However, if any allegation is ever raised which might go to the Prime Minister's integrity, the ABC would of course make inquiries into it and seek to report it. As for matters concerning Mr Bruce Wilson, ABC News will cover the case against him as it proceeds.

    Once again thank you for your query.

    Best regards,

    John Mulhall

    ACT News Editor, ABC News

    This email address is being protected from spambots. You need JavaScript enabled to view it.

    After we published that missive our readers hit their keyboards and biros in droves.

    But beyond putting Bruce Wilson up (to say Gillard knew nothing) followed by Blewitt and Styant Browne on the 730 program, the ABC delivered very little coverage.

    When Victoria Police detectives flew to Queensland to interview Olive Brosnahan - the ABC reported nothing.

    When the Operation Tendement task force was set up - the ABC reported nothing.

    When the Fraud Squad raided Gillard's office on 15 May 2013 - the ABC reported nothing.

    On 17 June 2013 The Australia reported on the warrant - and the Victoria Police statement that issues of client legal professional privilege over some documents "should be cleared up within two weeks".

    The ABC reported nothing. Again our readers hit the emails and letters.

    On 19 June 2013 one of our readers received an emailed response from the ABC. Keep in mind Gillard was then PM and the police were preparing to argue that all the documents created by her and seized in the raid were created in the furtherance of fraud (which was the finding of the Chief Magistrate when he adjudicated on the matter).


    Original Message
    From: News-On1ine
    Sent: Wednesday, June 19, 2013 10:01 AM
    To:
    Subject: RE: Victoria Police Raid on Slater and Gordon

    Dear Mr

    Thank you for your email.

    The ABC was aware that an alleged raid had occurred. However, we were unable to confirm

    it had happened and therefore, we did not report it.

    Kind regards

    ABC News Online

    Later in June, the Gillard Government made this announcement of $190M in extra funding for the ABC:
    Funding

    The ABC is primarily financed by the federal government through triennial funding arrangements. In the 2013-14 Budget, the government is providing the ABC with an additional $30 million over three years to meet the growing demand for its digital services. The ABC will also receive $69.4 million over four years from 2012-13 to expand its news and current affairs services. In addition, the government will provide a loan of $90 million over three years to the ABC to assist with the construction of a purpose-built ABC facility at Southbank, Melbourne.

    In 2013-14, government funding to the ABC will total $1.05 billion.


    July, August, September - nothing.

    Nothing as the privilege case worked its way through the courts.

    By September we were facing the Abbott election. And still nothing from the ABC.

    One of our readers wrote to the ABC and passed the note on to me:

    Date : 2-4/09/2013

    Contact type: Complaint

    Location: VIC



    Subject: Police Investigation into three people including J Gillard.

    Comments: I would like to know why the ABC has not reported the following information:

    1. Police removed boxes of evidence from Slater and Gordon in May, as a result of a search warrant that names Julia Gillard as a person of interest.

    2. Police have confirmed in writing that Julia Gillard is under investigation for her role in a Fraud. Copies of this document are publicly available!

    3.Police will be in Court on October 16 and will be asserting that Julia Gillard created documents that were created in furtherance of a fraud and will be seeking to use those documents to pursue the conviction of people, including possibly Julia Gillard herself.

    In summary; what the hell is wrong with you people? Why is it that you are deliberately avoiding reporting this issue, a matter of significant public interest? Why did you quickly end the coverage on live TV this week when Rudd was asked by a reporter about the matter? When is your recalcitrance on this issue going to end and when can we expect some factual reportage in exchange for our dollar ?

    Finally, can you PLEASE assure me that you will have a reporter in Court on October 16 to provide the community with factual reporting on the matter? As the best resourced news organisation in the Southern Hemisphere I think this is the least you can do!

    Network - Other

    RecipientName - Audience & Consumer Affairs Referer - Complaint


    The ABC's news and current affairs (which houses 4Corners) honcho replied.

    From: News Caff [This email address is being protected from spambots. You need JavaScript enabled to view it.]
    Sent: Monday, 16 September 2013 2:12 PM
    To:
    Subject: Police Investigation into three people including J Gillard.

    Dear M

    Thank you for your email regarding investigations being conducted by Victoria Police.

    It is a matter of public record that some form of investigation is underway. We know this because the ABC extensively reported the fact that Ralph Blewitt and others took information to the Police.

    Beyond this, there are few confirmed facts which would reach the threshold of ABC editorial standards for reporting. We accept that other media may operate to a different standard, but we do not intend to compromise our own.

    Reporting that the (then) Prime Minister of the nation is under police investigation is an enormously significant call to make. It cannot be made on supposition, on rumour, or on hearsay.

    You have said that Vic Pol have confirmed this in writing, but we have not cited this media release or public communication. According to The Australian they’ve been collecting files but you would expect any Police investigation to gather up this sort of primary documentation. That does not mean Ms Gillard is under investigation.

    For all we know, the investigation could be into Ralph Blewitt, or Bruce Wilson or Slater and Gordon or any number of other individuals and entities.

    Rather than mimicking other media reports, the ABC is following fine principles of reporting confirmed fact.

    When such facts become available, you can be sure the ABC will report them.

    Yours sincerely

    Adam Doyle

    ABC News

    There was a bit more email toing and froing with Mr Doyle and our reader - and he explained the threshold for the ABC to report on the police raid and investigation.

    Sent: Monday, 16 September 2013 3:10 PM
    To: '
    Subject: RE: Police Investigation into three people including J Gillard.

    Dear M

    I can’t say for sure whether a reporter with a mic will be filing live reports on the steps of a court, but if and when Victoria Police announce that they are investigating Ms Gillard, you can be sure the ABC will report them.

    Yours sincerely

    Adam Doyle

    ABC News



    ABC 4Corners found no difficulty in resourcing and speedily presenting a program on Pauline Hanson based on disgruntled former members statements, apparently unlawfully recorded phone calls and the flagrant presentation by the ABC of legally privileged confidential communications in emails between Ms Hanson and her lawyers.

    But Gillard was protected from scrutiny.

    Anyone think the ABC is not broken?

    Read More...
    3 months ago

News

Major Topics

Helpful Resources

Socialize

About Us