People take a Mars Bar deserve to be jailed. Finance tricksters are just doing what come natural grow up (ODT)
As the fallout from the royal commission continues, stockbroker Marcus Padley has delivered a blunt message for those who find finance too confusing: grow up.
“People have got to somehow get their head around finance,” he said.
Category: Finance
I was working in retail filling shelves at night and I got promoted to assistant business manager. It was a huge jump in income. I went up from about $30,000 to about $60,000. Six weeks later, I got a new car, a top-of-the-line Toyota Camry. I was like, “It’s the next thing to do, you buy a new car when you get a new job”. So I had $2,000 for the deposit and it was a $33,000 loan through the seller’s financing company. I assumed that every year my salary would go up with inflation and I thought I could pay it off within two or three years. I don’t have the car anymore, it was taken off me when I went bankrupt.
I had a single bed. I thought, “Well, I’m meeting people, so I’m going to buy some furniture”. I bought a bedroom suite from Domayne a few months after the car. It was a queen bed, mattress, bedside table, tallboy, and lamps. It cost $6,500. I got an interest-free credit card with a $10,000 limit. I paid $150 a month on a fixed five-year term.
My Dad has never been good with money. He’s a truck driver, an owner-trader. For one of his loans to buy a truck, the security was my grandparents’ house. He was about to default on that loan, which means that my grandparents would have lost the house. I was the only one who was financially viable at that point, so Dad expected me to help. I took out a $15,000 loan to pay off his loan.
In a multimillion-dollar windfall for pay-day lenders, automatic loan machines are popping up in suburban shopping centres, allowing some of Australia’s most disadvantaged communities to take out loans worth thousands of dollars with their bank cards.
Many short-term credit contracts can have an annual interest rate of 60 per cent, compared with up to 25 per cent for credit card cash advance. CashNgo charges a 20 per cent fee and 4 per cent monthly interest.
Goldman Sachs: The bank that rules the world
Ever since the stock market crashed, on the night of September 15, 2008, the name Goldman Sachs, or GS, has been appearing everywhere: in the collapse of the financial system, the Greek crisis, the plunge of the euro, and the campaign to prevent regulation of financial markets.
The investment bank created in New York in 1868 has carved out its reputation and success by working silently behind the scenes.
But today GS stands accused of myriad charges: playing a key role in the subprime loan fiasco, pushing several of its competitors into bankruptcy, helping countries like Greece hide their deficits before speculating on their downfall, precipitating the fall of the euro, and influencing the consumer price index. And yet GS has come out of this latest crisis richer and more powerful than ever.
http://media.theage.com.au/business/businessday/secret-files-expose-nab-6281323.html
Adele Ferguson examines revelations that NAB sacked financial advisers over forgery and poor ethics.
The National Australia Bank has quietly paid millions of dollars in compensation to hundreds of clients given what it considers inappropriate financial planning advice since 2009.
The bank is the latest institution to face disturbing revelations of misconduct in its financial planning division, with a Fairfax Media investigation uncovering instances of forgery, “rogue advisers” and multiple sackings inside its financial advice arm.
A cache of confidential internal documents obtained by Fairfax Media reveals that, according to NAB, 31 of its financial planners were terminated, suspended or had their resignations “ensured” due to conflicts of interest, inappropriate advice, inappropriate practices or repeated compliance breaches.
Whistleblower Jeff Morris says the government should not have ignored calls for a royal commission into financial planning. Photo: Rob HomerThat figure does not include sackings from the NAB-owned Meritum advice operation, which, according to NAB, has terminated six financial advisers in two years.
One August 2014 “advice review” document, authored by NAB’s head of wealth, Andrew Hagger, says “we have highlighted a number of other major incidents from over the past five years (some completed and some ongoing) including those related to replacement insurance advice, gearing advice, and the adequacy of resources devoted to clients complaints handling.”
The document was circulated as NAB was being criticised and forced to pay hundreds of millions of dollars in compensation to customers in its UK arm for mis-selling of insurance products.
Illustration: Ron TandbergIt confirms that “rogue advisers” operated within NAB Wealth, and speaks of “other major incidents” from the past five years in which some advisers forged their clients’ signatures and manipulated documents in attempts to cover up misconduct.
Investigations into three of these cases were “continuing” at the time the document was written.
Disturbingly, the document states that these instances were not detected by the bank’s internal controls, but through client complaints or queries by authorities.
The revelations, which follow the fraud and forgery scandal inside the Commonwealth Bank’s financial planning operation, will add to calls for a royal commission into the financial advice sector – a move that the Abbott government has so far refused to consider, despite a royal commission into CBA being recommended by a high-profile bipartisan Senate inquiry last year.
“One of the worst ‘captain’s calls’ of the Abbott government was to dismiss this recommendation out of hand, despite readily calling royal commissions into unions and pink batts when it suited them,” said Jeff Morris, the whistleblower who exposed the planning scandal at CBA.
He said the NAB revelations added to the case for an even more wide-ranging royal commission into financial services and white-collar crime.
Alan Kirkland, the boss of consumer advocacy group Choice, said on Friday that Australia’s financial planning industry was “dangerous” and read like a scandal rap sheet. “CBA, Storm Financial, Great Southern, Westpoint, Fincorp, Trio, Timbercorp – which makes it even more alarming that less than 2 per cent of financial advice licensees will be subject to proactive surveillance by ASIC,” he said. He called on the government to boost the spending of the Australian Securities and Investments Commission to better monitor dangerous industries.
The NAB documents were provided to Fairfax Media by a concerned internal bank whistleblower, who was not willing to trust NAB’s whistleblower protection policies.
The whistleblower has told Fairfax Media of a volatile, toxic and Machiavellian culture within NAB Wealth. “I’m providing this information because a lot of us are frustrated with the ‘motherhood’ statements and lack of commitment by management to take these issues seriously,” the whistleblower said.
Mr Hagger told Fairfax Media that the bank had paid between $10 million and $15 million in compensation to 750 customers for inappropriate advice since 2009.
When asked whether every client of advisers NAB had sacked, suspended or forced to “resign” had been offered a review of their files, and compensation if warranted, Mr Hagger said clients were contacted on a case-by-case basis.
“Where we believe it’s appropriate to advise customers we have done so,” he said. “In many cases we’ve written to customers and have offered them an advice review … in some cases that has also led to compensation.”
He said NAB Wealth did not have “systemic issues” but “we do have individual cases” of poor advice within its network of 1700 advisers. He said NAB Wealth had a “proud track record” and had “very high industry standing”.
ASIC declined to comment on the specific issues raised in the NAB documents.
But it said it had a project under way focusing on the advice conduct of the four big banks, AMP and Macquarie Group. “We have significant work under way targeting those entities,” a spokesman said. “This includes work that covers NAB Wealth’s business. We cannot comment further on this work at this point in time.
“ASIC will expand its regulatory work on NAB’s financial planning and wealth management businesses to consider any additional issues that are brought to its attention and we urge Fairfax Media to share with ASIC any material it has, which might be relevant to our work involving NAB Wealth.”
“Many antique collectors unwillingly support terrorists like Islamic State, ” Michel van Rijn, one of the most successful smugglers of antique artifacts in the past century, told German broadcaster Das Erste this month.
And smuggling is booming in Iraq and Syria right now. In Iraq, 4,500 archaeological sites, some of them UNESCO World Heritage sites, are reportedly controlled by Islamic State and are exposed to looting. Iraqi intelligence claim that Islamic State alone has collected as much as $36 million from the sales of artifacts, some of them thousands of years old. The accounts data have not been released for verification but, whatever the exact number is, the sale of conflict antiquities to fund military and paramilitary activity is real and systematic.
Grainy video from soldiers fighting for President Bashar al-Assad’s regime at Palmyra, an ancient capital in what is now Syria, shows delicate grave reliefs of the dead, ripped out, gathered up and loaded into the back of their truck. The soldiers present the heads of decapitated statues to the camera. Other stolen Palmyrene treasures were exposed by an undercover reporter for The Sunday Times. Sculptures, pillar carvings and glass vessels were found to be on sale for knock-down prices in Beirut, Lebanon. Roman vases had been robbed from graves and were being sold by the box.
Across the disintegrating border, every party to the conflict is party to the plunder. Beyond Palmyra, the ancient city of Aleppo and hundreds of other sites in Syria have been looted by one armed group or another.
Smuggler Abu Khaled told Time that the Assad regime was selling antiquities to pay its henchmen. Senior Free Syrian Army fighters told the Washington Post that looting antiquities was “a vital source of funding.” Another smuggler told Le Temps that Islamist fighters take control of trafficking when gaining territory.
How much — and even what — has been bought and sold isn’t known for sure, but entire sites are being lost.
The International Council of Museums’ Emergency Red Lists, which document cultural objects at risk of looting in Iraq and Syria, include clay tablets that preserve some of the earliest writing in the world, intricate stone carvings and coins, in addition to the other items mentioned above.
Penn Cultural Heritage Center’s Brian Daniels revealed to the New Yorker that he had seen such items for sale in border town markets in Turkey.
Of course, it is hard to prove how many of the looted antiquities have made it to the West. And Kate Fitz Gibbon, a lawyer who advises antiquities collectors, argues that there is “no credible evidence that looted art is coming from Syria to [the] U.S.” and that, rather, it is flowing “unchecked to Turkey, the Gulf States and other nearby nations.”
Still, experts have shown a 145 percent increase in American imports of Syrian cultural property and a 61 percent increase in American imports of Iraqi cultural property between 2011 and 2013, which suggests that the illicit trade is reaching American consumers by ‘piggybacking’ on the legal trade. Furthermore, archaeologists Jesse Casana, Mitra Panahipour and Michael Danti have found evidence that looters are specifically targeting Classical antiquities in order to supply what is mostly a Western demand for Greek and Roman art.
An investigative report by the German broadcaster NDR documented evidence that antiquities looted by terrorist groups were being sold through German auction houses. The report revealed how Syrian conflict antiquities were smuggled as handicrafts, laundered with obscuring or outright false documentation, and then sold on the open market. It also exposed the transfer of antiquities to Gulf States, where they were laundered for resale in Western markets.
We must not be misled by antiquities collecting lobbyists’ insinuation that Syria or Iraq’s antiquities are better smuggled than burned by the various groups of militants – the smuggling pays for the burning. Paramilitary profits from looting and smuggling underwrite the cost of war, ethnic cleansing and genocide.
So what can be done to stop this?
An emergency ban on trading in undocumented Syrian antiquities may help Syria now, but it will be no more effective against the perpetual, global threat than the ban on trading in undocumented Iraqi antiquities that preceded it.
Instead, it would make more sense for other nations to copy Germany’s law that will oblige dealers and collectors to present an export licence from where the object is coming from, in order to receive an import licence for any ancient artifact. That will cut the supply of illicit antiquities to the market, and thereby cut the flow of money to looting and smuggling mafias and militants.
There’s real urgency here. These glimpses into our past are disappearing before we can learn from them or they can be shared with their creators’ descendants. They will end up as art divorced from its culture – some in unscrupulous museums that hope they have been laundered just enough to appear clean, many more displayed as talking pieces in the homes of the wealthy or secreted away in private collections.
There is a certain irony about Macquarie Bank warning against new financial regulations, when only six years ago it was begging the government for help, writes Ian Verrender.
Q. What are the two greatest weapons in a businessman’s arsenal?
A. Chronic memory failure among the broader community and a compliant business media.
Macquarie boss Nick Moore used both to full effect last week when he issued a dire warning to David Murray, the man heading the inquiry into the future of Australia’s financial system.
Think twice about imposing new regulations on our banks to protect taxpayers from a collapse, Moore warned. Such regulations could backfire and cost the nation dearly.
Missing was any hint of the frantic desperation of six years ago as Macquarie careered out of control, under siege from an army of steely eyed traders betting the bank would go down.
The panic took hold just a few hours after the collapse of Lehman Bros on September 15, 2008. What did Moore and his executives do? They went begging for help.
But you’ll never see or read the juicy details of emails found under FOFA They’ve been suppressed.
According to Treasury, should the contents of those emails or meeting notes ever come to light, they “could reasonably be expected to adversely affect the Macquarie Group”. Heaven forbid!
Macquarie was saved. And so began the myth that the Australian financial system somehow was better and stronger than the rest of the world, that it alone survived the great global financial crisis where all others failed.
It is a myth now being employed as a dangerous argument as to why Australian banks should not be subjected to the kind of controls now being considered by global regulators.
The bank’s share price plunged from about $98 to $15.75 as short sellers attacked what they believed was a mortally wounded beast.
Between them, they borrowed more than $120 billion under the taxpayer AAA guarantee with Macquarie accounting for about $20 billion. They now make a song and dance about having to pay a fee for the privilege – as though bank fees somehow are a foreign concept.
Mortgages on overpriced Australian real estate accounts now total about $1.3 trillion, 40 per cent of that sourced from offshore debt markets.
According to ratings agency Moody’s, mortgages account for about 65 per cent of all bank loans. Hardly what you’d call a diversified portfolio
No wonder bank executives are worried.
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Chris Bowen said the government’s changes to the FoFA regulations had scored a ”daily double” by reducing consumer protections from unscrupulous financial planners and increasing red tape.
”They’ve emasculated the requirement to work in the best interests of the client,” he said.
Now, independent Senators Nick Xenophon and John Madigan have introduced two amendments to tackle the worst and arguably most potentially dangerous aspects of the Coalition’s reforms – namely general advice and changes to the best-interests duty.
Considering the banks and AMP own or control up to 80 per cent of the financial planning industry, as Nick Xenophon put it,
“The financial services industry is big enough and ugly enough to look after itself and … consumers are the ones government should be providing with certainty and adequate protections.”
But hey…we’re open for business. Caveat emptor.
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