The latest compliance issues in wealth management across Asia-Pacific.

ASIC
ASIC has banned former National Australia Bank branch manager, Rabih Awad, from engaging in credit activities and providing financial services for seven years.

The ban is the result of an on-going ASIC investigation, following a breach report lodged by NAB alleging that bank employees in the greater western Sydney area were accepting false documents in support of loan applications and falsely attributing loans as having been referred by NAB introducers in order to obtain undue commissions.

ASIC found that Awad gave NAB information and documentation in loan applications that was false or misleading.  Awad was found to have given NAB false payslips, letters of employment, and entered false referee contact details in NAB’s lending systems in multiple home loan applications.

A majority of the false documentation submitted to NAB by Awad was provided to him by a real estate agent, who was previously registered as a NAB Introducer.

Awad has the right to lodge an application for review of ASIC’s decision with the Administrative Appeals Tribunal.

CBA
Commonwealth Bank of Australia (CBA) has entered into a court enforceable undertaking with ASIC in relation to its bank bill trading business and its participation in the setting of the Bank Bill Swap Rate (BBSW), a benchmark and reference interest rate in the Australian financial system.

As part of the undertaking, CBA will pay AU$15 million ($11.1 million) to be applied to the benefit of the community and AU$5 million towards ASIC’s investigation and legal costs.

CBA will also engage an independent expert to assess changes CBA has made (and will make) to its policies, procedures, systems, controls, training, guidance and framework for the monitoring and supervision of employees and trading in prime bank bills.

On 21 Jun, the Federal Court in Melbourne imposed pecuniary penalties totalling AU$5 million on CBA for attempting to engage in unconscionable conduct in relation to BBSW. CBA admitted to attempting to seek to affect where BBSW set on five occasions in the period 31 January 2012 to 15 June 2012.

CBA also admitted that it failed to do all things necessary to ensure that they provided financial services honestly and fairly and that its traders were adequately trained.