ASIC Seeks $240M in Penalties for ANZ's Widespread Misconduct

Australia and New Zealand Banking Group Limited (ANZ) has admitted to unconscionable conduct in its dealings with the Australian Government, including overstating bond trading volumes by tens of billions of dollars. The bank also acknowledged widespread misconduct across products and services, affecting nearly 65,000 customers.

The Australian Securities and Investments Commission (ASIC) has filed four separate proceedings and will ask the Federal Court to impose penalties totaling $240 million.

The proceedings involve:

• Misconduct in a $14 billion bond deal, including inflated trading data reported to the government over nearly two years
• Failure to respond to hundreds of customer hardship notices, some delayed for over two years
• False and misleading statements about savings interest rates, with tens of thousands of customers underpaid
• Failure to refund fees charged to deceased customers and failure to assist families managing estates within the required timeframes

ASIC is seeking $125 million for institutional and markets matters, including a record $80 million penalty for unconscionable conduct, and $115 million for the three retail matters.

According to ASIC Chair Joe Longo, the penalties are the largest ever announced by the regulator against a single entity, citing “fundamental issues with ANZ’s risk and compliance culture that require the Board’s and executives’ urgent attention.” Deputy Chair Sarah Court added that, if imposed, the penalties would send a clear message that “the cost of breaking the law is not an acceptable cost of doing business.”

With this latest action, ASIC has now brought 11 civil penalty proceedings against ANZ since 2016, with proposed and ordered penalties exceeding $310 million.

Recent actions against banks also include the SFC’s $23.8 million fine on Deutsche Bank and the NZ FMA’s warning to Kiwibank over customer overcharging.