CHOICE membership

Royal Commission into the Banking, Superannuation and Financial Services Industry



Headline: CBA agrees to $700m penalty in ATM fraud case

Who else gets asked if they would pay a substantial fine and who else gets reported this way?

For individuals and small organisations the headline would be “Fred Nerd fined $700”, “JJ Smith and Sons pay big fine” or maybe “Arturo Dubrovnic refuses to pay fine, says he will go to jail”. Whether you want to pay or not the attitude is you’ve done the deed so pay up or suffer the consequences.

However if you’re worth a few zillion it’s “Dodgy Bros. International agrees to pay”. Either in reality or in perception, or both, the super rich can choose.

Speaking of perceptions, some say Australians suffer from the Tall Poppy Syndrome. Perhaps we would not if so many of our tallest were not so putrid.


Leaving reporting/journalism aside, where it is best left …

Deals or plea bargains are done at all levels - and on all kinds of golf courses, public and elite :wink:


CBA’s fine is a joke merely a penalty on the shareholders, once again the ‘executive class’ will get away scott-free.
I bet they still get their bonuses.

I have said it before and I reiterate:
Modern shareholder owned public financial services companies are a fixed game run for the benefit of the executive class, with the shareholders interest running a distant second and the company’s customers considered nothing more than a viable target of exploitation.


The principal of a Company in law is that it is not a person. It has “Limited” liability. That’s the bit on the end of the name. It suited ancient English men of wealth and in many instances men of title. The law does not bind us to that tradition. Our parliament is able if they so choose as a nation to amend corporations law.

I can only ask what does it need for it to change and repeat from many weeks pror:

There is now $700M that will not be going to shareholders! If I’d allowed my staff to blown that much in any past employment I’d be unemployable for life!


From an article on ( on the $700 million CBA fine just to put it into perspective as a “penalty” for them.

"Just as the revelations were making headlines in August last year, CommBank posted a full-year net profit of $9.9 billion.

On the stock exchange, news of the fine was welcomed, with the bank’s shares gaining around $1.03, or 1.5 per cent in value. That is the equivalent of a $1.76 billion growth spurt to its capitalisation in just one day, and rather dwarfs the fine. The upwards movement tended to suggest that the market may have estimated the fine would be much higher, even in the 10s of billions, if the maximum penalty had been handed down."

The fine actually caused an improvement their capitalisation on the Stock Exchange by around $1.06 BILLION over the amount of the fine and was about 7% of their NET profit for the year in which the offences became public. Was it enough of a fine? By those measures you would have the right to an opinion it was rather lacking and in fact may be encouraging for the Bank to act in the same way again.

Based on the figures above I would say the Shareholders got a boost to their value rather than a decrease. They may now be much happier to pay bonuses to the Executives and Board for improving their outlook.


Hello Mark. Whilst I agree with the thrust of your posting very much, I would make a few amendments. Firstly, I think that it is the Corporations Law (or whatever it is called in modern days) which actually does provide that a corporation IS a “person” at general law. The principle which you write about is that the liability of its ‘members’ – read: owners or shareholders – is limited – to the amounts invested in their shares, and any amounts unpaid on non-fully-paid-up shares. The Corporations Law does have provisions which make company board members and executives liable in certain circumstances – such as those which you ask for, and it is those which are twisted to get them out of tight corners – as well as the general uselessness of ASIC to police the laws which are under its control.


@grahroll: WOW! I LOVE your approach to the analysis of this situation.
I am in awe of your ability! Wow! Stand by for me to call upon you for assistance when I next need a dose of high-quality lateral thinking and analysis! ha ha. Congratulations. VERY well done.


Also totally amazed. Looks like Grahroll has it in one. Not even a whiff of any wrong doing. There is even more gold in the strong box now than a year ago! Does ASIC also get to keep the $700M to help it work better I wonder?

Appreciate the more accurate views on corporations law than my feeble view from the gallery. No doubt the notion of a trial by Jury is also too challenging in such cases? Thanks Ray


No ASIC don’t get the money it goes mostly to the Department of Finance (Consolidated Revenue) for the Government to spend in anyway they desire. Some may be diverted elsewhere but as an amount this diversion is generally small.


Oh well - thats good to know. A little knowledge can be helpful. The ABC has a great synopsis for those who have an interest and have not read it.

The following from the ABC article commented:
$700m ‘horse trading’

Mr Lynch said a close reading of the agreed statement of facts showed some significant “horse-trading” went on between AUSTRAC and the CBA.

"There was horse-trading in the statement about admissions of liability to protect the bank and its management from class actions," he said.

“It certainly pulls its punches over who was responsible and what happened; was it negligence, hubris or management disregarding its responsibilities,” Mr Lynch said.

This refects ray15 and his previous observations although in this instance the action is based on legislation relating to foreign currency management.


I think this is more likely to explain the situation. CBA paid up without a court case to avoid evidence being released that might cost them much more as it would bolster class actions. The idea that the board did it to push up the share price looks doubtful.


That is the case. It is why we have the category ‘natural person’, ie a human, where ‘person’ might be a corporation or a human.


You don’t say which customer owned bank you are with, but after having worked in the banking industry for 35+ years, the only bank that may rate as customer owned and located in Victoria is Bendigo Bank. The other so called customer owned banks (of a creditable size and safety) are somewhat discrete in stating who processes their work and who they are beholding too.


I use two; ME Bank and Bank Australia.
Both very competitive on interest rates and both low fee.


ASIC have commenced a Civil Law case against Westpac for their Financial Advice problems caused by a former employee, Mr Sudhir Sinha. Amazing what a Royal Commission can do to stir up regulators who previously seemed asleep at the wheel. It also may be a way ASIC recovers some of the money that is being cut out of their budget.


@TheBBG: “It is more likely to be carefully crafted to, and is working, exactly as intended.”

Yes Minister: “…two basic rules of government: Never look into anything you don’t have to. And never set up an enquiry unless you know in advance what its findings will be”. (The Complete Yes Minister, p. 453)


The big problem is getting the banks to agree to a Banking Number. We need to remember that we are not just talking about the big 4 agreeing, but all the smaller banks (eg. the Ex Credit Union banks like ME and the Australia Bank who have very limited back office support infrastructure and in many cases rely on the big 4 for funding) and the overseas banks in Australia also agreeing.


The big problem is, "who provides the funding to enable Federal, State and Local Governments to run in a deficit mode. All Governments have one of 3 choices to fund their spending (above what they collect in a weekly tax collection). This is also true for the small banks like The Australia Bank and ME Bank (ie. Ex Credit Union lenders).

  1. Funding from the big 4 banks
  2. Borrowing from overseas banks at hefty interest rates
  3. Or as was tried in the Whitlam Labor era, Try to borrow on the quiet from a shifty middle man, and hope you are not caught.
    Why do people think that the Labor Opposition is very quiet on the dramas / cons surfacing.because they know how the funding for Governments to run a country needs to be obtained.


Most gov’t funding is from issuing bonds to various investor organisation, companies and individuals


Yes partially true, and who are the investor organisations that can be relied upon for a few hundred million $ when required (I haven’t checked by Savings Account lately, but I don’t think I have a spare $bil or so, at least till next pension day… I worked in one of the big 4 for over 30 years, Australian Governments were into the banks for huge amounts, especially for projects that were public / private partnerships. Remember when the banks would not deliver more money for Mr Whitlam, his ministers tried to sneak a loan form the Arab countries which was partly responsible for his downfall.