Banks’ breaches branded ‘crimes’

CBA committed more than 13,000 crimes and the NAB also broke criminal law, the royal commission heard.

Michael Hodge QC — 31 West Chambers

Commonwealth Bank committed more than 13,000 crimes and the National Australia Bank also broke criminal law, counsel ­assisting the banking royal commission, Michael Hodge QC, said last night.

And the regulators responsible for overseeing the nation’s $2.6 trillion superannuation pile, the Australian Prudential Regulation Authority and the Australian Securities & Investments Commission, have also been tarred as failures in a scathing submission to commissioner Kenneth Hayne by Mr Hodge, who suggested a new regulator may be needed to clean up the sector.

While the royal commission has been told it is open to find ­numerous instances of criminal breaches of financial-services laws against bank-run retail super funds, the inquiry fell short of recommending significant findings against union and employer-backed industry funds, such as AustralianSuper, that gave evidence at the hearings earlier this month.

In his closing submission, which followed two weeks of hearings into super, Mr Hodge also floated “desirable” changes, such as banning all commissions through superannuation and prohibiting all ongoing service fees, and extending best-interests obligations from the super trustee to all related parties in a corporation dealing with the super fund.

Mr Hodge said it was open to Mr Hayne to find that CBA “was right to acknowledge” to APRA that it had committed 13,000 criminal offences by failing to transfer members from a high-fee fund to a low-fee MySuper fund by a deadline of January 1, 2014.

The failure resulted in further breaches of civil provisions of superannuation and corporate laws, he said. The banks have a week to respond to Mr Hodge’s submission.

Mr Hodge said NAB committed a criminal breach of super­annuation laws because its super trustee company, NULIS, failed to make sure the super funds it controlled were run solely for the benefit of members.

He said NAB also committed crimes by failing to report ­serious financial-service licence breaches to ASIC within 10 days.

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