BREAKING A major bank has been fined millions for 22 contraventions of the Corporations Act.
Westpac will have to pay $9.15 million and ASIC's court costs.
The case relates to poor financial advice provided by a former Westpac financial planner, Mr Sudhir Sinha, in breach of the best interests duty and related obligations under the Act. Westpac is directly liable for these breaches because the law imposes a specific liability on licensees for the breaches of their financial advisers.
"The relationship between Westpac and Mr Sinha was structured so that Mr Sinha was able to share in the commissions and fees earned or derived when, as a result of his advice or recommendations, clients signed-up for financial products in which Westpac or associated companies had an interest," said Justice Wigney, who heard the case.
"As will be seen, that rather cosy arrangement turned out to be fruitful for both Mr Sinha and Westpac, but not always for their clients."
Justice Wigney found that Westpac ought reasonably to have known, from 1 July 2013, that there was a significant risk that Mr Sinha would not comply with the best interests obligations and that it failed to ensure that financial services covered by its licence are provided efficiently, honestly, and fairly.
The case is separate from Westpac's ongoing battles with APRA, AUSTRAC, and ASIC over breaches of AML/CTF legislation.