The Australian Securities and Investments Commission has issued a warning that some of the world’s largest securities firms have breached their fiduciary duty by refusing to provide financial records of a former employee who was terminated from a job at a bank that was involved in the bank’s financial troubles.
Key points:Investment company CBA says it has refused to provide documents to former employee Casey AnthonyLawyers for the company say the documents are in the public interestLawyers representing the bank say it was in the interests of the firm to act quickly after the former employee’s termination.
The case has highlighted the complexities of conflicts of interest in the financial sector, and the need for strong internal governance in all firms.
It is the first time ASIC has expressed concerns about conflicts of interests and it comes after the Australian Securities & Investments Commission (ASIC) made a similar warning about the actions of some of Australia’s biggest banks.
It said ASIC had been aware of “significant concerns” about the bank for some time, and that it had received reports from staff that it was not fulfilling its statutory duties as an ASIC-regulated financial institution.
“As a result of this, ASIC has informed the bank that it has declined to provide any of its records or documents to Mr Anthony for the period of time he has been on leave,” ASIC said in a statement.
“This includes, without limitation, all correspondence between the bank and Mr Anthony, all financial records and accounts of the bank or any records and records of any of the other directors of the company.”
Mr Anthony, a former senior manager at the financial services firm BHP Billiton, was terminated on the day he began work in October 2013.
His employer, BHP, is the largest publicly traded Australian company, with annual revenue of more than $1 trillion.
It was in breach of ASIC’s fiduciaries duty to ensure Mr Anthony complied with its own statutory requirements, ASIC said.
In a statement, ASIC’s managing director, Mark Withers, said ASIC’s concerns were based on “the bank’s ongoing compliance processes”.
“The compliance processes ASIC is engaged with are designed to identify any possible breaches of its duty,” he said.
“While ASIC has a duty to protect the public’s interest in disclosure of the financial position of its regulated entities, it also has a fiduciarial duty to act in the best interests of its employees and the public.”BHP is in the position of the largest financial institution in Australia and has a significant amount of assets, including bank accounts, that it needs to protect and manage.
“Mr WitherSays ASIC had received several reports of bank officials withholding information about the former worker’s position from ASIC, and he would be prepared to investigate further.”
It is important to note that this matter is now under investigation and no formal complaint has been made to ASIC by BHP.”BHB is one of the biggest banks in Australia.”
It is for ASIC to decide whether or not to pursue any such investigations.”BHP said in an emailed statement it was “aware of ASIC warning” and had been “careful and responsive” to ASIC’s inquiries.
“It is important to note that this matter is now under investigation and no formal complaint has been made to ASIC by BHP.”BHB is one of the biggest banks in Australia.
It has a $4.7 trillion market capitalisation.
In November last year, BHB’s former head of compliance, Peter Maitland, was arrested in Sydney and charged with three counts of breach of the Companies Act.
He was later released without charge, but was later suspended by the bank, following a court hearing in February.
Mr Maitville was charged with five counts of wilful and negligent misconduct, three counts each of breaching the Companies and Corporations Act and the Corporations and Corporational Finance Act.
In March, he was given conditional discharge from his duties.BHP declined to comment on the ASIC warning, but a spokesperson said it had been advised by ASIC about Mr Anthony’s concerns.
“We are currently working with ASIC to investigate the issue, and will continue to cooperate with ASIC as required,” the spokesperson said.
It follows a report by the ABC’s Background Briefing programme in October, which revealed the financial records that BHP had withheld from ASIC had previously been released by the Australian Competition and Consumer Commission (ACCC).
The ABC’s investigation found BHP’s failure to release records related to its former chief financial officer, Michael O’Brien, had been linked to the financial crisis.BHS chief executive David Hirsch was also charged with one count of wilfully and negligently failing to act and was released without bail.
Bail was set at $50,000.
Mr Anthony was laid off from BHB in November 2013 after nearly four years of work.
The ABC contacted BHP and BHP said it was confident it complied with ASIC’s duties and that its processes had been reviewed.
“Our processes are in place to ensure that we provide records to ASIC in