Westpac will pay around $87 million in compensation to about 32,000 customers whose financial advisers failed to notify them of market-sensitive information about their shareholdings over a fourteen-year period.
The Australian Securities and Investments Commission found the bank’s advisers had withheld an estimated 328,000 pieces of important information on corporate actions by ASX-listed companies such as share buybacks, share purchase plans and takeover offers. ASIC said Westpac’s failure to properly inform customers caused them to miss out on potentially lucrative opportunities.
These opportunities included buying additional shares at a discount to the market price, the creation of temporary rights or options that could be sold for a profit and the ability to sell shares for a tax advantage, the regulator explained.
The breaches were self-reported to ASIC in July 2019 and occurred between 2005 and 2019. The regulator is now calling on anyone who is concerned they might be affected to contact Westpac, which will determine on a case-by-case basis how much compensation is required.
Westpac’s advice businesses involved in the remediation program include Securitor Financial Group Limited, Magnitude Group Pty Ltd and Westpac Banking Corporation, which is known as BT Financial Advice. These businesses ceased providing personal financial advice in 2019.
ASIC Commissioner Danielle Press said compensating customers affected by misconduct is an important part of a licensee’s obligations to “act fairly, honestly and efficiently”.
“We encourage affected customers to engage with the communications from Westpac to understand how they were impacted and to seek further information from Westpac if required,” Ms Press said.
A Westpac spokeswoman said the problem was historical and directed customers to BT’s website for further information. “Westpac apologises to any client of its former advice business who may be impacted by this issue and there is a dedicated website with further information,” she said.