Why should banks get away with it?

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Don't fear, you won't be prosecuted, just slapped on the wrist with a warm lettuce. But by then, as was the case with the CBA, you may already have been promoted! Disagreeably, you and your bank may have to endure a tad more reputational risk, say, if a firebrand senator such as John ''Wacka'' Williams sees fit to push for a public inquiry. Even then, as seen in the Senate inquiry on Thursday, your overlords at the bank would label your doings ''inappropriate''. You would not be a fraudster, merely an ''inappropriatester''. As for the bank, there is nil chance of prosecution. It might have to endure some enforceable undertakings. These EUs are in lieu of prosecution and they are beauties because the bank only has to sign stuff promising not to be naughty again. No more fraud, forgery, or misleading and deceptive conduct for instance, but who knows, that doesn't proscribe a spot of grand theft auto or serial arson unless expressly stipulated by the coven of lawyers concocting the undertakings. For the whole unfortunate affair to be taken any further there would need to be adverse findings from the inquiry, then, heaven forbid, action taken to address said findings. As we know, there is rarely any nexus between adverse findings and actual reform. Besides, the EU doesn't have to carry an admission of fault on behalf of your bank. It's an undertaking, not a finding. Lovely; all over red rover? Except perhaps for the ambulance chasers. Maurice Blackburn did run a class action against CBA and won a settlement for some victims - though small cheese for a $126 billion bank. The winnings from churning and burning far surpass the penalties. This is the nub of it. The deterrent for bad behaviour is minuscule. As every schoolkid knows, getting caught is not good, but being pinged for 5¢ in pocket money … whatever! Appearing before the senate, CBA whistleblower Jeff Morris said in compelling terms this week that the scandal was not about a rogue salesman, nor was it confined to one bank. It was a systemic issue. It was about culture and commissions and the failure of regulation. The banks can ill afford for even their most rogue operators to be prosecuted before the courts. Inevitably, the Nuremberg defence would be invoked. The manager would be dragged in, the internal processes tested, the manager's managers, richly remunerated for the profitable endeavours of their underlings, would be put in the box. The whole bank would be put in the box. Read more: http://ift.tt/1iHjxLU

What did the banks do? They gave people 'financial advice', when in reality they were selling people rip off, high fee products, and hiding that fact.

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