EXCLUSIVE
The country's biggest bank, Commonwealth Bank, concealed financial improprieties by one of its top financial planners who controlled an estimated $300 million in investments on behalf of 1300 clients, many of them retired and with serious health issues.
The planner, Don Nguyen, who joined the bank in 1999 and has since been banned from providing financial advice until 2018, allegedly forged signatures, created unauthorised investment accounts and overcharged fees.
A Fairfax Media investigation can reveal that bank staff participated in a cover-up that allegedly included the falsification of documents after Mr Nguyen left his position in July 2009. It can reveal the bank's financial planning division ignored repeated allegations of misconduct outlined by at least 25 clients and bank insiders known as the "ferrets", who tipped off the corporate regulator in October 2008.
The bank became aware of Mr Nguyen's transgressions in 2006. In September 2008 he was suspended for a month and, despite an internal investigation uncovering evidence of serious misconduct, including charging excessive fees and paying kickbacks to staff members for referrals, he was promoted. The whistleblowers believed he should have been sacked.
One of the whistleblowers died in June 2010, six months after leaving the bank. He was 35 and died in his sleep. Others still work in the industry and do not want to be identified.
Another whistleblower, Jeff Morris,agreed to be identified to warn others about the perils of whistleblowing and the lack of support he received from the regulator, the Australian Securities and Investments Commission.
Mr Morris said: "My advice is don't be a whistleblower. The stress is unbelievable. The impact on me and my family was horrendous."
At least nine known victims are still waiting for full compensation from the bank. Financial Resolutions Australia is representing eight of them.
One client, a former priest in his 70s, said the bank offered him an extra settlement of $14,000 this year but he refused it on the basis he believed he was still owed $28,000. It is understood 200 clients have been offered $23 million in compensation payments.
ASIC was alerted to Mr Nguyen's conduct on October 30, 2008, in a detailed fax from the whistleblowers. They warned: "The client files will basically tell the story - as they did for the internal compliance people. There is some urgency in securing them as they are being 'cleaned up'."
It took ASIC 16 months to follow up the fax. The regulator then raided CBA's offices to seize the files. The whistleblowers sent a similar warning to senior managers at the bank.
In themeantime, client funds continued to deteriorate.
Retirees Mervyn and Robyn Blanch, who invested $260,000 with the bank's financial planning arm, were forced to live on government support after their savings plummeted to $92,000.
On March 10, 2011, Mr Nguyen was banned for seven years from working as a financial planner. Seven months later ASIC imposed enforceable undertakings on CBA.
CBA sent settlement offers to clients. The existence of the banning order and the comments in the order concerning his conduct were not disclosed, stating only he had provided "inappropriate advice".
Despite providing a long statement, the bank refused to comment on allegations of a potential cover-up. It did admit that a "small number'' of clients received offers of compensation before its formal investigation, and some were revised to a higher figure.
In a follow-up statement, the bank said: ''We acknowledge it was a difficult process reviewing some of Mr Nguyen's client files. Where documentation was lacking, we contacted those clients and asked for their records and we used these to assist our review.''
Mr Nguyen did not respond to requests for comment.
Nothing would surprise me about the CBA. The harder they bully the more they are trying to hide, inflicting their angst on weaker and subservient credit victims and members of staff.
As for ASIC working against the interests of fellow Australians whom they are paid to serve and protect ... !!!
No more softly softly on rotten companies and corporates at the expense of ordinary Australians.
No more plea bargains by ASIC. Having ASIC as part of the prosecution team is the kiss of death on real justice.
Australians everywhere are being ripped off by this misconduct and corruption everyday of every week.
Govt and bureaucrats must stop pandering to the Banks and criminals immediately. No excuses.
What has been reported is only the ice shavings of tip of the iceberg. Go get the rest of the evidence and put it on the table for all Australians to see the actual size number and size of the crimes committed and human suffering in this country.
It was all so unnecessary. All that was needed was a government with the stomach to take on the big end of town and follow through with it in the interests of all Australians. Otherwise we simply revert to the Law of the Jungle.
We need a Royal Commission into Banking - pronto.