ASIC puts $644m back in customers’ pockets in record enforcement year

Australia’s corporate cop hit banks, superannuation funds and financial firms with a record $830 million in court-ordered penalties last financial year, helping return $644 million to customers and investors.

The Australian Securities and Investments Commission recorded its biggest enforcement year on the back of a damning catalogue of ugly behaviour by some of the nation’s largest financial institutions.

ASIC chair Sarah Court said the regulator was pursuing misconduct that caused direct harm while exposing deeper failures in company systems and governance.

“Our enforcement work is focused on misconduct that causes real harm and we are delivering results, forcing change, strengthening accountability, and returning money to consumers and investors,” she said.

The regulator’s action against HSBC Bank Australia delivered one of the year’s clearest examples of those goals overlapping.

HSBC admitted failures in its systems for detecting and responding to scams and was ordered to pay a $35 million penalty. The bank has separately paid about $21.5m in compensation through a remediation program prompted by ASIC’s investigation and recovered a further $6.5m for customers.

Macquarie Securities was also fined $35m after systemic reporting failures caused millions of short sales to be incorrectly reported, compromising the accuracy of market data.

Westpac was ordered to pay $26m over widespread failures in its handling of customers seeking financial hardship assistance, while Mercer Super received $10.3m in penalties for failing to report significant breaches to the regulator.

The regulator also took aim at unlawful lending practices, securing a $33.5m penalty against Walker Stores, which traded as Snaffle, after consumers were charged almost $20m in excess interest.

The corporate watchdog launched more than 250 investigations during the year, filed 32 civil cases and began 18 criminal prosecutions.

Its criminal work produced 25 convictions, including 21 custodial sentences. Eleven offenders were ordered to serve time in prison.

Former Sydney fund manager Rodney Forrest was resentenced in May to five years and three months for a $3m insider trading scheme involving Platinum Asset Management shares.

Former financial adviser Anthony Torre received a six-year sentence for fraud involving the misappropriation of superannuation savings.

Ms Court said the figures showed enforcement was not simply about imposing larger fines after misconduct had occurred.

“It is about detecting misconduct sooner, preventing harm where we can, and securing remediation for those affected,” she said.

“Where we see serious harm or risks to market integrity, we will act quickly and use the full range of regulatory and enforcement tools available to us.”