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SYDNEY (Reuters) – Australian Treasurer Scott Morrison warned on Wednesday that financial sector executives responsible for widespread breaches of corporate law could face jail, as a powerful judicial inquiry heard more evidence of misconduct by the country’s top financial institutions.
Morrison’s comments were made after executives for AMP Ltd (AMP.AX), Australia’s largest wealth manager, admitted on Tuesday that employees had lied to the corporate regulator for almost a decade to cover its practice of charging thousands of customers for services they did not provide.
In further testimony to the so-called Royal Commission on Wednesday, AMP executives admitted that it had charged users of online platforms for advice fees despite not receiving the permission required by law.
“What has occurred here and what has been admitted to in the Royal Commission by AMP is deeply disturbing,” Morrison told reporters on Wednesday. “This type of behavior can attract penalties which include jail time. That is how serious these things are.”
The government-backed Royal Commission into Australia’s banking sector is just a couple of months into what is expected to be a year-long investigation and public grilling of senior executives in the country’s financial sector.
The center-right government agreed to call the inquiry after years of scandals in Australia’s financial sector, including interest-rate rigging, accusations that some institutions withheld legitimate insurance payouts, and accusations of money-laundering.
It is currently focusing on the provision of financial advice by AMP and the four largest banks: Australia and New Zealand Banking Group (ANZ.AX), Commonwealth Bank of Australia (CBA.AX), National Australia Bank (NAB.AX) and Westpac Banking Corp (WBC.AX).
In coming months, the inquiry will turn its attention to large insurers and pension funds.
Reporting by Paulina Duran; Editing by Jane Wardell and Muralikumar Anantharaman
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