Company Fined $27,500 after Ignoring Infringement Warning
The Australian Securities and Investments Commission (ASIC) has issued a credit infringement notice to a Sydney-based mortgage broker after it ignored an ASIC warning and continued to advertise credit services without being registered, licensed or authorised to offer such services. The $27,500 infringement is the first of its kind to be issued by ASIC and is described by ASIC chairperson Greg Medcraft as “an alternative to commencing civil penalty proceedings” after a company refuses to comply with a warning that they are in breach of the National Consumer Credit Protection Act 2009 No. 134 (Cth). ASIC reserved the right to commence civil proceedings if the company does not pay the infringement notice within 28 days.
ASIC’s media release (28 June 2011)
ASIC Accepts Enforceable Undertaking for Compliance Culture
The Australian Securities and Investments Commission (ASIC) has announced that it has accepted an enforceable undertaking from financial services operator Kilara Financial Solutions Pty Ltd (Kilara) following the company’s recommendations of a superannuation fund from October 2006-June 2008. ASIC held concerns that Kilara had failed to consider their clients’ existing superannuation funds or their personal circumstances in provideing their advice, and either failed to provide, or provided defective, Statements of Advice. Kilara has undertaken to remedy past compliance concerns and to modify aspects of its compliance culture.
ASIC’s media release (24 June 2011)
Fukushima Bosses Apologise
Taiwan News reports that the directors of Tokyo Electric Power Co (TEPCO) have apologised for the Fukushima nuclear plant’s meltdown, addressing a meeting of angry investors. TEPCO chairperson Tsunehisa Katsumata reportedly said that “[a]ll of us directors apologise deeply for the troubles and fears that the accident has caused” and that “[t]he entire group will work together to resolve this crisis as soon as possible”.
Taiwan News: Japan utility behind damaged nuke plant apologizes (28 June 2011)
(Source: Taiwan News)
Courts Get Tough on White-Collar Crime
Dealbook reports that Taylor, Bean & Whitaker Mortgage Corporation (Taylor Bean) chairperson Lee Farkas has been convicted on 14 counts for falsifying mortgages and is expected to serve about 24 years in prison. The case is reportedly “the latest in a string of prominent cases in which judges have imposed substantial punishments” signalling that the US Courts intend to get tough on white collar crime.
Dealbook: Tough Justice Persists in White-Collar Crime Cases (30 June 2011)
In related news, Bloomberg reports that government-sponsored enterprise Fannie Mae allowed Taylor Bean to commit the $3 billion fraud by failing to report the 200 “bogus” loans it discovered between 2000-2002. Fannie Mae was reportedly deposed in the recent prosecution of Mr Farkas, revealing that it sought only to “rid itself of liabilities and cut ties with a mortgage firm selling loans ‘that had no value’”.
Bloomberg: How Fannie’s Silence Opened Way to $3B Fraud (1 July 2011)
(Source: DealBook, Bloomberg)
Potential Public Anger Over Executive Payout
Europe, Middle East and Africa
The Guardian reports that government-backed owner of Britains’ railway tracks and stations, Network Rail, has agreed to a £1 million payoff for former chief executive Ian Coucher, with Transport secretary Phillip Hammond warning that the move could anger public. The payment plan reportedly includes one year’s pay in lieu of notice and a settlement in relation to the company’s incentive plan, with other senior executives due to receive similar payments. Reportedly, the payoff is based on Mr Coucher’s contractual rights, however Mr Hammond has opined that the decision “doesn’t sit well” with taxpayers, who are ultimately funding Network Rail.
Guardian: Fury over £1m payoff for Network Rail’s Iain Coucher (22 June 2011)