Big banks and insurers could be on the hook to fund a possible $100 million shortfall in payments to former Dixon Advisory clients who have sought compensation via a government scheme to help victims of financial misconduct.
The Compensation Scheme of Last Resort, which is set pay out at least $300 million to victims – mainly relating to Dixon Advisory – has been branded a moral hazard by Liberal senator Andrew Bragg, who says regulators won’t pursue misconduct if taxpayer and industry funded funds are available.
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Jonathan Shapiro writes about banking and finance, specialising in hedge funds, corporate debt, private equity and investment banking. He is based in Sydney. Connect with Jonathan on Twitter. Email Jonathan at jonathan.shapiro@afr.com
Carrie LaFrenz is a senior journalist covering retail/consumer goods. She previously covered healthcare/biotech. Carrie has won multiple awards for her journalism including financial journalist of the year from The National Press Club. Connect with Carrie on Twitter. Email Carrie at carrie.lafrenz@afr.com
