Fearsome penalties needed to deter greed… Commonwealth Bank offers customers in excess of $500k compensation... New home sales hit 5 year high...
Tougher penalties for white collar crime: ASIC chairman
Australian Securities and Investments Commission chairman Greg Medcraft is bringing down the hammer on financial crimes, calling for tougher penalties to shape up poor culture and misconduct running rife in white collar institutions, according to an article in The Australian.
The article quoted Medcraft saying at a stockbrokers conference in Sydney that penalties were needed that "inject so much fear it stops people from breaking the law" and act as a formidable deterrent.
"The fear must be greater than the greed," he said. "Tougher penalties for white collar crime will provide the right nudge so that fear can overcome greed."
"When culture is rotten and inappropriate investments become worthless, it is not the wealthy who are being fleeced," Medcraft said. "It often is ordinary Australians who lose their money. Markets might recover but often people do not."
He said financial institutions needed to scrutinize their current practices for whether good or bad conduct is being driven by current remuneration and rewards and to create an environment where employees feel they can speak up and raise their concerns.
"People are sick of it. They want to have trust and confidence in the institutions they are dealing with."
Commonwealth Bank offers customers in excess of $500k compensation
The Commonwealth Bank has offered more than half a million dollars to customers in compensation for poor financial advice, the Sydney Morning Herald reports.
The CBA has offered compensation to 13 per cent of customers so far under its ongoing advice review program, with nearly 500 staff dedicated to the review.
CBA was forced to open up a compensation program in 2014 enabling any customer of Commonwealth Financial Planning and Financial Wisdom between 2003 and 2012 to have their files reviewed for poor advice, the article said.
Investigating past files has been a long process and some customers are not happy with the length of time it’s taking. Chief executive Ian Narev last month said a "painstaking " investigation into past files would take the rest of 2015 and the majority of next year.
New home sales hit 5 year high
Latest data from The Housing Industry Association (HIA) shows sales of new homes have climbed for the fourth consecutive month in April, the highest since at least 2010, according to an article by Reuters.
Falling mortgage rates and the rising house values are drivers of the rise with data from the HIA’s New Home Sales Report showing sales of new homes rose 0.6 percent in April, from March when they jumped 4.4 percent.
“While the rise of 0.6 per cent in April was the slowest growth pace of the four months, this is still a strong result off the back of a healthy March quarter,” said HIA chief economist Harley Dale.
Sales of multi-units rose 0.9 percent in the month, with sales of detached homes up 0.4 percent.
"The profile for new home sales in 2015 is consistent with a new home building cycle where further upward momentum resides largely in the 'multi-unit' sector and where the eastern seaboard states are driving the further growth," Dale said.
