National Australia Bank Ltd (NAB) is being sued by the country’s securities regulator for “several thousand” breaches of company law, in another blow to the scandal-tainted Australian banking sector.
The Australian Securities and Investments Commission (ASIC) said in a filing yesterday that the Melbourne-based lender charged customers for financial planning services that they never received, failed to maintain adequate compliance systems, and contravened its obligation to act efficiently, honestly and fairly.
The lawsuit adds to the litany of legal cases facing Australia’s large banks, which came in for withering criticism in an independent inquiry into financial sector misconduct early this year. The relevations that banks charged fees for services that they did not provide was one of the inquiry’s central findings.
The bank’s former chairman and chief executive officer resigned in February, soon after being singled out for blame by the royal commission inquiry.
“‘Fees for no service’ misconduct has been widespread and is subject to ongoing ASIC regulatory responses including investigations and enforcement actions,” regulator Deputy Chairman Daniel Crennan said. “ASIC views these instances of misconduct as systematic failures, unfair to customers including those that are more vulnerable.”
National Australia takes the claim seriously “and will now carefully assess the allegations,” bank chief legal and commercial counsel Sharon Cook said. “We will continue to work cooperatively and constructively with ASIC to deal with this issue.”
The bank expects to complete compensation efforts by June next year, Cook said.
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