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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: ASIC mulls test case on CBA directors’ duties

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ASIC mulls test case on CBA directors’ duties

The Australian 12:00am April 30, 2019

Richard Gluyas

 

There’s widespread nervousness among company directors ahead of a decision by ASIC on whether to mount a directors’ duties case against Commonwealth Bank over its response to 2016 warnings from Austrac that the bank’s ATMs were being used for money laundering.

The watchdog is likely to make an assessment of its options before the end of the year. For directors, the big issue is ASIC’s adoption of a broad or narrow interpretation of their duties.

Given the Hayne royal commission’s spotlight on culture and ASIC’s new-found aggression, the fear is that the agency’s new enforcer, Daniel Crennan QC, could mount a test case, arguing that the CBA directors failed in their duty to set an appropriate culture.

If successful, a significant breakdown in institutional culture would become a recognised breach of directors’ duties.

An unsuccessful prosecution could ultimately lead to the same result if a newly elected Labor government decided to change the law through legislation.

Either way the CBA investigation, which is continuing, is shaping as a landmark exercise that will determine the future legal framework of the nature and extent of directors’ duties.

ASIC is also looking at potential breaches by CBA of the bank’s disclosure requirements in relation to the Austrac probe.

Two class actions have already been lodged against the lender — one by Maurice Blackburn and the other by Phi Finney McDonald. CBA’s share price sagged by more than 5 per cent on August 3, 2017, after Austrac launched its case alleging more than 53,000 transgressions of anti-money- laundering legislation.

The case was settled in June last year for $702 million.

Zip in a sweet spot

Credit card disrupter Zip Co joined has joined the exclusive unicorn club — a rare breed of start-up with a $1 billion-plus market capitalisation.

While local dollars don’t quite match greenbacks (the globally accepted currency for unicorns), Zip is in a sweet spot as a serious number two to Afterpay among buy now, pay later companies.

It’s been cash flow-positive for the past four quarters and is also starting to reap the benefit of network effects due to an expanding base of users and merchant partners. Tech-company valuations tend to defy human understanding. Even so, Zip’s house broker Shaw and Partners came up with an astonishing result yesterday when it applied the same revenue multiple to Zip enjoyed by its locally listed Israeli rival Splitit Payments.

Instead of yesterday’s $2.88 close, Zip stock would be worth $36 a share or $12.7bn.

Shaw and Partners published a disclaimer: “We don’t value nor think advisers should value Zip like this, but provide reference on Splitit for interest.”

Spotlight on McEwan

Royal Bank of Scotland chief executive Ross McEwan’s protest that it was a “total coincidence” he resigned at the same time as National Australia Bank is looking for a new CEO seems to be falling on deaf ears.

The British press said on the weekend that McEwan risked losing almost £1.7m ($3m) in unvested bonuses if he joined a rival institution like NAB, even if it was located at the other end of the planet.

In a hostile environment for bankers’ pay, NAB risks a shareholder backlash if it determines that McEwan is the best candidate and decides to compensate him for lost earnings at RBS.

The Edinburgh-based lender’s 2018 annual report says it made a pre-grant assessment of Mc­Ewan’s entitlement to a £1.75m long-term incentive.

While last year was a good one, with a number of legacy issues resolved and the resumption of dividends, the bank still considered that a 6 per cent reduction was appropriate due to shortcomings in customer and risk outcomes. The 2019 award level for McEwan’s LTI was therefore set at £1.65m.

It’s not too big to be a deal-breaker but it will certainly exercise the mind of the NAB board if McEwan does, in fact, tick most of the boxes. His record at CBA both before and after he left will also be heavily scrutinised.

As head of the retail bank, McEwan was pipped by Ian Narev in a majority decision by the CBA board in 2011.

Six years later as RBS chief executive he was again in contention, but alert to the danger of publicly throwing his hat in the ring for a different job, especially if he was unsuccessful.

One insider says a complicated situation arose, with McEwan seeking a level of comfort that he would get the job without risking that his cover would get blown. In the end, the board made a unanimous decision to go with Matt Comyn.

McEwan stayed at RBS, announcing his surprise resignation last week but staying in the role for up to a year while the board searches for a replacement.

At NAB, a committee chaired by non-executive director Ann Sherry is in charge of the selection process, advised by search firm Russell Reynolds. Interim chief executive Phil Chronican, who will become chairman when Ken Henry’s resignation becomes effective, will stay in the loop.

Medibank Private boss and ex-NAB chief financial officer Craig Drummond is another external candidate thought to be in contention, with NAB retail boss Mike Baird and business banking head Anthony Healy the internal candidates.

 

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