The Senate inquiry into the performance of the Australian Securities and Investments Commission (ASIC) has heard that the Commonwealth Bank (CBA) promoted financial planner Don Nguyen, despite allegations of fraud.
Speaking at the inquiry Commonwealth Bank (CBA) wealth management group executive Annabel Spring said: "In this more senior position he would actually see fewer clients. He would supervise, but he would actually physically see fewer clients."
This came in response to a question by Labor Senator Mark Bishop about Nguyen's promotion following an internal investigation that included accusations of alleged forgery and fraud.
"He was also relocated to Chatswood, where he would be under closer supervision of his manager," she explained, and added that "clearly that was the wrong decision under the view of the investigative reports and as events unfolded, but it was the decision taken at the time."CBA general counsel David Cohen admitted that this and other decisions were "wrong," and noted that the first internal investigation into Nguyen's behaviour had come out "inconclusive in its findings."
Cohen admitted that "we did have poor systems, we did not have the right people, and we did not have the right culture."
"I don't think it's correct to say that all of the conduct was in that [very poor, shocking] category, but there certainly was conduct in that category."
CBA noted a number of documents with client signatures that clients were claiming they hadn't signed.Client claims of document forgery included those of a woman who could prove she was not in Australia at the time the documents were signed.
After a second investigation, CBA put remediation processes in place and looked at about 7,038 client files.
"A lot of these cases were actually remediated and we had very good communication between the customer or their legal representative," CBA head of advice Marianne Perkovic said.
"There was a selection of customers where it did take a longer time, because of multiple requests of information that we didn't receive."
Maurice Blackburn Lawyers principal John Berrill told the committee that CBA had "no checks and balances in place" and that Nguyen was "allowed to run wild, he was rogue."
Berrill said that the problems were not limited to Nguyen and added that the bank had "a big cultural problem and boiler room mentality."
"Nguyen had been so successful that he was being promoted as the 'pin up boy' and there was a lack of people at senior level looking at it and questioning if it was legitimate to do that."
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