A former senior financial planner at Westpac has been banned from the financial services industry for life after he allegedly submitted false insurance policies and used fake signatures and conversations to back-up his submissions.
The Australian Securities and Investments Commission (ASIC) says Martin Hodgetts submitted nine false insurance claims between May and September last year.
ASIC alleges the documents contained invented details such as imaginary conversations and false signatures which had not been approved or requested by any existing or new Westpac customers.
Hodgetts also allegedly used the bank’s internal software system to alter the details of two of the false policies after submitting them in order to avoid detection.
The decision to ban Hodgetts for life came from investigations made as part of ASIC’s Wealth Management Project.
ASIC deputy chairman Peter Kell said in a statement Hodgetts’ conduct was “misleading and deceptive”.
He says it was driven “purely by the commissions he collected which is completely contrary to the integrity required of a person in his position”.
Hodgetts is now facing criminal charges in relation to the conduct, with ASIC referring the matter to Victoria Police.
Professor of commercial law at Melbourne University, Ian Ramsay, told SmartCompany it was “fairly rare” for ASIC to impose a permanent ban.
“The permanent ban indicates the seriousness of which ASIC viewed Hodgetts’ alleged behaviour,” he says.
Another issue of significant interest in the case is the police involvement, Ramsay says.
“Clearly once you’ve got someone falsifying policies,” he says.
“That’s more than negligence, that’s certainly something that warrants referral to the police.”
Ramsay says he understands ASIC’s Wealth Management Project had come about after a number for complaints in the area of financial services and “highly critical reports” from parliamentary inquiries about the standard of financial advice that people have received.
“Too often [it] has been deficient,” he says.
“Also there are undoubtedly cases which have come forward where people have lost substantial amounts of money.”
Ramsay says evidence of lack of compliance and monitoring within the largest financial organisations was another “critical issue” behind the ASIC project, especially as the regulator has uncovered “quite significant evidence of failings” in recent times.
Ramsay welcome’s the regulator’s investigations because he says it will help instil confidence among consumers.
“I think what we’re seeing now is consumers react to some of these ongoing scandals coming out of big institutions, where ASIC’s role is not only to enforce the law but to reinstall confidence in the financial advice industry,” he says.
A spokesperson for BT Financial Group told SmartCompany this morning that it was taking the matter “very seriously”.
“We self-identified an issue through our monitoring processes and proactively alerted ASIC,” the spokesperson says.
“There was no customer impact as a result of his actions.
“Mr Hodgetts resigned from WFP in September 2014.”
The spokesperson said the action taken by ASIC was in line with the group’s stance at Monday’s senate inquiry in which it recommended the 11 planners that had been reported to ASIC for serious compliance breaches, including Hodgetts, not be allowed to work in the industry again.