Business

Apr 23, 2018

The top five worst scandals revealed by the royal commission (so far)

If you're feeling overwhelmed by the sheer volume of banking scandals, and don't know where to start, here's a rundown of some of the worst.

Charlie Lewis — Journalist

Charlie Lewis

Journalist

Today, the royal commission into banks that we definitely didn't need continues. So far, what the hearings have revealed has been, as Bernard Keane put it in these pages, "shocking even for veteran finance watchers, in both the scale and the seniority of involvement within major corporations".

The quantity and quality of the scandals has already become overwhelming, so Crikey has put together a handy top five of the worst we've heard so far.*

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28 comments

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28 thoughts on “The top five worst scandals revealed by the royal commission (so far)

  1. Marcus Hicks

    Bribes at NAB……isn’t that the same Bank that O’Dwyer worked for, & who sponsored a fund-raiser for her prior to the last election?

  2. Malcolm Wyburn

    Although not as dramatic as your 5 top of the chart scandals, but equally important is the concept of percentage fees. So if I have $2M invested, they can charge 1%($20K), 2% ($40K) etc rather than a charge that represents the work someone actually does (or doesn’t) do.
    Mal

  3. Marcus Hicks

    Wasn’t it kind of Morriscum to make sure any fines or prison sentences will *not* be retrospective…..assuming such penalties ever actually get implemented. Were the Unions given the same leeway?

  4. graybul

    The scandal Charlie you have not mentioned, is worst of all . . . government complicity in shredding of electorates trust. Having done so, our national social fabric no longer enfolds Australians as one people.

    We are now divided. Between beneficiaries and casualties. Disullusioned, fearful, envious and angry. The political, corporate and institutional reinforcing of our social fabric, built over decades, generations (AMP); is riven. Kelly O’D’s recent ‘Insiders’ smarm cannot make good; nor Board’s of banks, Financial behemoth’s apologies . . . merely further enrage.

  5. MJM

    Last year I bought “Game of Mates: How favours bleed the nation” by Cameron Murray and Paul Frijters. The first sentence reads: “This is the story of how Australia became one of the most unequal societies in the Western world, while merely a generation ago it was one of the most equal.”

    It is not just the banks/ASIC that are allowing, even colluding in, ripping us off in every transaction we undertake. The same pattern is clearly visible in the property, transport, superannuation, power and mining industries. Other “gifts” are given, exchanged, bartered by mates, keeping the ordinary people shut out of benefits and bearing the full costs. It is a shocking story paid little attention.

    Having read the book, which took a while as I was sure it was raising my blood pressure to unhealthy levels, I am not surprised by the Banking RC revelations. I am surprised at how few people seem to understand the real costs that we pay every day.

  6. klewso

    The profits they’ve been making and the way they’ve made them – how economical was the jettisoning of moral and fiduciary responsibilty to make room to take on more avarice.
    For years these bastards have given usury a bad name – all in the name of the pursuit of profits, in the name of “rewarding their investors” : while we “marks/rubes” were a commodity to be exploited.
    All the readily available evidence that this was, too commonly, “business as usual” banking m.o. : to everyone but those in authority, with the resources to rein in such otherwise (in any other industry – or union) unconscionable behaviour?
    All they had to do, to continue, was go on making profits to be able to divert some of those profits to buying the protection of government.
    ….. “Suddenly” they can see the light? They can even see what they’ve been doing wrong for so long?

  7. Appalled Observer

    On the 13 April 2018 ASIC accepted an Enforceable Undertaking (EU) from the CBA for Fee for No Service Conduct by CBA subsidiaries.Does anyone but ASIC ‘s senior management think this is an appropriate penalty- given community outrage at this Conduct revealed in the Royal Commission? Should ASIC be prepared to rely on attestations from CBA management as to remediation (one of the requirements of the EU)?

  8. AR

    It should not be forgotten that until recently it was fervently argued by all the usual suspects that a company’s first duty was to its shareholders, everything else the means to that end.
    Suddenly there is shock-horror that the same ethos exists in the finance industry which insists on using the obscene term “product” for the evil schemes they concoct.
    The raw material is the customer’s money and the sole aim is the efficient transfer to the aforementioned shareholder, aka doG.
    The public? ptaahh!

  9. James Brown

    Surely the worst scandal is that responsible ministers deny knowing about the extent of the abuses. This suggests that:
    They were either not aware of what was happening in their portfolio so they should resign.
    —————–
    The regulators were not aware and therefore need major rebuilding
    ——–
    The regulators briefed public servants who failed to inform ministers
    ———
    The whole approach to regulation, which ultimately costs consumers vast amounts of money (compliance costs by honest operators) or scams run by the dishonest, is unsound. Players are assumed to be honest, so scams are unlikely.
    No. If you can think of a scam it is almost certainly operating along with a vast number of others you cannot even imagine (Freakonomics:A Rogue Economist Explores the Hidden Side of Everything, Levitt and Buber, 2005,

    1. Woopwoop

      Indeed. Do the public service employ people whose job it is, with all new legislation, to think up ingenious ways it could be scammed if one had the mind to? If they don’t, they ought to. it might have prevented a lot of scandals, like the VET Fee-help one for example.

      1. bref

        Brilliant idea Woopwoop. Maybe they can offer inducements, such as TVs in their cells, to the people that end up in jail over this to help. That’s of course assuming any of these a-holes end up in jail.

    2. Marcus Hicks

      Yep, it’s the AWB bribery scandal all over again. Downer was either corrupt or incompetent…..& so too Morrison, O’Dwyer, Cormann & Turnbull.

  10. klewso

    The irony in this is that if these same people had been doing what they’ve been doing – but on the other side of the counter :-
    if they’d been ripping people off; standing over them; demanding money with menaces; fraudulently taking money for services not delivered; inducing fear and stress (foreclosure, dispossession etc) while wearing “Friendly and Trustworthy Bank Manager” masks,
    they’d have been “bank robbers” : breaking the law?

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