CommSec and former CBA-owned AUSIEX cop record $27.1m fine
Commonwealth Bank-owned online stockbroking firm CommSec and a business previously owned by the bank called AUSIEX have been hit with a record $27.1 million in fines for widespread failures over a nine-year period, including overcharging clients more than 120,000 times.
The Federal Court this week announced the penalties, which included the largest ever fine for breaches of the market integrity rules, and also ordered an independent review of the businesses’ compliance systems.
Commonwealth Bank-owned Commsec has copped a $20 million fine.Credit:Will Willitts
The Australian Securities and Investments Commission (ASIC) on Wednesday said CommSec had been fined $20 million, while AUSIEX, an equities business that was owned by CBA at the time of the breaches, had been fined $7.12 million. AUSIEX is now owned by Japan’s Nomura Research Institute.
ASIC said both businesses had broken market integrity rules through a large number of breaches, which included $4.3 million in overcharging of fees on 120,933 occasions, and failures to comply with client money reconciliation requirements.
“It is essential that market participants have appropriate systems, governance and controls in place to ensure they meet their obligations to both their customers and the financial markets in which they operate,” ASIC’s deputy chair Sarah Court said.
“CommSec and AUSIEX both demonstrated widespread, systemic compliance failures over a nine-year period. CommSec’s failures also resulted in millions of dollars being overcharged to customers.“
The Court ruled both businesses did not have the necessary systems in place to meet their compliance obligations. ASIC said CommSec had compensated customers who were overcharged, and it said both CommSec and AUSIEX had co-operated in the matter.
More to come.
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