Bankers in firing line with new criminal penalties

BANKERS and finance executives will face up to 10 years in jail if they engage in corporate misconduct under new criminal penalties to be unveiled today.

BANKERS and finance executives will face up to 10 years in jail if they engage in corporate misconduct under new criminal penalties to be unveiled today.

And their financial institution would cop a $10 million fine or lose 10 per cent of their annual turnover. The Australian Securities and Investments Commission will also have new powers to access texts and phone calls between financial advisers and bankers.

Those considered improper, unfit or incompetent would be banned from working in the ­financial services industry ­entirely. The measures come in the wake of more revelations yesterday at the banking royal commission of corporate rip-offs.

New penalties were not in response to the royal commission, Ms O’Dwyer said.

The latest scandal involves the Commonwealth Bank charging for financial advice even after customers have died.

Financial Services and Revenue Minister Kelly O’Dwyer, who has been working on the new criminal and civil penalties and ASIC’s expanded powers since October 2016, said the tough new penalties were crucial. “Our new regimen means that bankers and other executives in the financial services industry will be subject to up to 10 years jail for criminal behaviour,” she said. “These penalties will have the capacity to hit the bottom line of corporations if they are found guilty of ­engaging in serious criminal behaviour.”

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The offences that would ­attract 10 years in jail or a $10 million fine for a company ­include knowingly misleading consumers by providing defective disclosure documents, dishonest conduct and corporate fraud offences.

Ms O’Dwyer said the new penalties were not in response to the royal commission, which will issue its final report on February 1 next year, but followed recommendations of the Murray Financial Systems Inquiry which launched in 2013.

Facing an attack from Labor over the Turnbull government’s initial reluctance to hold a royal commission in the banking sector, Ms O’Dwyer said notable financial scandals and collapses, such as Trio Capital, Great Southern and Storm Financial, happened on Labor’s watch.

“Mr Shorten was minister for financial services and superannuation for almost three years, during which he had the power to propose ­inquiries and to draft laws, and yet he did virtually nothing,” she said. It also emerged at the royal commission yesterday that a senior Westpac financial planner gave advice to a nurse and her husband that resulted in them losing their home.