The Australian Securities and Investments Commission has commenced civil penalty proceedings against Westpac Banking Corp. over alleged poor financial advice provided by Sudhir Sinha, one of its former financial planners.
The corporate regulator alleged that in four sample client files, Sinha breached the "best interests" duty, provided inappropriate advice and failed to prioritize the clients' interests. In June 2017, the regulator banned Sinha from providing financial services for five years.
ASIC said June 15 that Westpac is liable for alleged breaches of the "best interests" obligations by Sinha and also violated the law that requires the bank to do all things necessary to ensure that the financial services covered by its licence are provided efficiently, honestly and fairly, and comply with financial services laws.
Westpac told the regulator that it paid about A$12 million in compensation to clients impacted by Sinha's poor advice and ongoing advice service failures as of June 14.
The proceeding is listed for a directions hearing in Sydney on July 19.