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westpac

The "did he jump or was he pushed" departure of Brian Hartzer, the CEO of WestPac Banking Corporation in Australia after it became known that it had more than 23 million cases in which it did not act correctly under counter-money laundering laws is the latest example of a CEO going from his job under a cloud. In the past, that's usually been an end to at least some of the discussion. But this time it's different. This time the failures were so big and so fundamental that it calls into question conduct of the entire organisation including the full board and much of the management structure. It also raises something else. In large, complex, highly regulated groups, is the role of CEO too big for one person? As the financial services sector moves inexorably (and I would argue rightly) towards personal responsibility, is it time to review where responsibility lies in relation to specific areas of management.

CoNet Section: 

AUSTRAC, Australia’s anti money-laundering and terrorism financing regulator, has today applied to the Federal Court of Australia for civil penalty orders against Westpac Banking Corporation (Westpac).

The civil penalty orders relate to systemic non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). AUSTRAC alleges Westpac contravened the AML/CTF Act on over 23 million occasions.

BIScom Subsection: 

Another day, another judgment against an Australian banking group for misconduct. The Australian Securities and Investment Commission's civil action against two WestPac group companies ended with findings of fault - but, again, ASIC has not succeeded on grounds upon which it thought it was safe. Spoiler alert: the case was commenced before the start of the Royal Commission on Misconduct in Banking, etc.

BIScom Subsection: 

It's one of those times where there is double take. Are you reading it right? A Court has said it will not approve an agreed settlement between a financial institution and a regulator? Oh, OK, it must be that the Court thought that the penalty was too light and he's sent the parties away to decide how much more should be paid, or perhaps penalties beyond money should be added?

No, that's not it. It's far more fascinating than that.

(previous story)

BIScom Subsection: 

Australian Securities and Investments Commission (ASIC) has announced that in an agreed settlement before the Federal Court, Australian financial services group Westpac will pay a civil penalty of AUD35 million after admitting breaches of Australia's responsible lending rules. The door-of-the-court settlement avoids a lengthy trial that should have started yesterday.

*** Update: see Westpac's new best friend? Australian Federal Court rejects settlement with regulator ***

BIScom Subsection: 

In Australia at present, there is a culture of attacking banks no matter what. Any handy stick can be used to beat them with. A case involving Westpac and a seriously ill disabled woman demonstrates that the craze has gone too far.

BIScom Subsection: 

 


 

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