The Australian financial regulator launched legal proceedings against Westpac Bank over alleged poor advice given by a sacked financial planner.
The Australian Securities and Investments Commission (ASIC) move could see the Sydney-based bank hit with multi-million dollar fines. At the heart of the regulators action is alleged poor financial advice provided by one of Westpac’s former financial planners Sudhir Sinha, ASIC said in a media statement.
Sinha was punished with a five-year ban last year for charging fees without providing all the advice customers had paid for. He systematically failed to meet his ongoing advice service obligations over a period of six years while he was employed by Westpac.
Fees Without Service
The financial planner failed to conduct ongoing reviews for at least nine clients. The clients had paid for ongoing advice services and were entitled to receive these reviews. In all 177 clients were charged fees but did not receive service by the former Westpac adviser.
ASIC alleged Sinha had provided inappropriate advice and failed to prioritise the interests of his clients. As Westpac held the financial services licence used by Sinha, the regulator claims the bank was liable for the alleged breaches of the best interests duty, which carry a maximum penalty of $1 million per breach.
