Watchdog attacked over scandal
On Wednesday night, Senator Doug Cameron put the regulator on notice to answer more questions about its conduct after revelations in Fairfax Media of improprieties by CBA financial planner Don Nguyen, who once controlled about $300 million in retirement savings on behalf of 1300 clients.
Mr Nguyen, whom ASIC banned for seven years, allegedly forged client signatures, created unauthorised investment accounts and overcharged on fees.
The 10 new questions come after Senator Cameron accused ASIC deputy chairman Peter Kell of failing to respond adequately to questions from Nationals senator John Williams at a Senate estimates hearing on Tuesday.
"This is a very serious issue for ASIC, it's a serious issue for the government and all the senators are concerned about it. So just don't take me on a waltz around the merry-go-round. Take that on notice," he said at the hearing.
He later told Fairfax Media that he wanted to see whether legislation was required to protect the public.
Both sides of politics question why the corporate regulator took 16 months to act on a tip from a group of bank whistleblowers who contacted ASIC in October 2008, warning that files were being "cleaned up" and ASIC needed to act urgently.
Senator Cameron asked ASIC for an estimate of the money clients had lost because of the inaction. He also wants to know why Mr Nguyen received only a seven-year ban after engaging in "illegal activity".
Mr Kell defended the oversight regime in place at the time of the alleged abuses from 2006 to 2009, although he acknowledged that standards at CBA's financial planning arm were "considerably below what was required".
Frequently Asked Questions about this Article…
The article outlines Fairfax Media revelations about misconduct in Commonwealth Bank's financial planning arm involving adviser Don Nguyen. He reportedly controlled about $300 million in retirement savings for roughly 1,300 clients and was alleged to have forged signatures, created unauthorised investment accounts and overcharged fees. ASIC has since banned him for seven years.
According to the article, Don Nguyen was a CBA financial planner who once managed around $300 million for about 1,300 clients. He is alleged to have forged client signatures, set up unauthorised accounts and charged excessive fees. The corporate regulator, ASIC, imposed a seven-year ban on him.
The article says ASIC eventually banned Don Nguyen for seven years, but its response has been criticised. A senior Labor politician publicly said ASIC was doing a "crap job" and senators have pressed ASIC officials to answer more questions about their conduct and the timing of their actions.
Politicians from both sides questioned why ASIC took 16 months to act after a tip from bank whistleblowers in October 2008 that warned files were being "cleaned up." Senator Doug Cameron demanded more answers at a Senate estimates hearing and raised whether legislation might be needed to better protect the public.
The article reports that Senator Cameron asked ASIC for an estimate of client losses, but it does not provide any specific figure. No confirmed total loss amount is given in the article.
The article notes Senator Cameron asked why Nguyen received only a seven-year ban after engaging in what was described as "illegal activity," but it does not record a definitive explanation for the length of the ban. ASIC's deputy chairman defended the oversight regime in place at the time but the article does not detail the penalty rationale.
Peter Kell defended the oversight regime that applied between 2006 and 2009, but he acknowledged that standards at CBA's financial planning arm were "considerably below what was required," according to the article.
The article highlights concerns about adviser misconduct, delayed regulator action and scrutiny from politicians. For everyday investors, the key takeaways from the reporting are to be aware that alleged forgeries and unauthorised accounts were reported, that ASIC has been criticised for its timing and handling, and that parliamentary figures are seeking answers and possibly new protections — all signals that oversight and adviser conduct can materially affect client outcomes.
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