Patience and time get ‘heads on spikes’

Australians could be forgiven for thinking that the behemoths in our financial services sector are untouchable. It seemed for a long time that calls for a royal commission, for example, kept falling on deaf ears and that complaints against banks and similar institutions were being given little more than lip service.
Regulators such as the Australian Securities and Investments Commission have been accused by commentators of neglecting responsibilities to ensure companies are complying with laws.
There are now prominent examples of Australian regulators will act and use the legal muscle available to them to remind financial institutions of their legal obligations.
These examples give a reason for Australians to be less cynical about the work regulators do to clamp down on corporate misbehaviour.
Consider the case of the recent Commonwealth Bank and the AUSTRAC settlement that will result in the bank paying out $700 million for its failure to ensure its systems properly reported transactions that exceed $10,000 and a range of other breaches.
The CBA’s rap sheet for noncompliance includes a failure to provide 53,506 threshold reports between November 2012 and September 2015 for transactions above $10,000 as well has failing to properly monitor transactions on 778,370 accounts.
You need to add the AUSTRAC settlement to the belting the CBA received from the Australian Prudential Regulation Authority following the recent review of the bank’s governance processes that tore into the poor performance of the board and management.
Criminal cartel charges, which are the result of investigations by the Australia’s competition watchdog, have been laid against Deutsche Bank, Citigroup and the ANZ. Those charges relate to alleged cartel conduct in the trading of ANZ shares by Deutsche Bank and Citigroup following an institutional share placement by the ANZ in August 2015.
A common factor in these case studies is the length of time between initial acts committed by entities and actions taken by regulators. These cases are independent of the poking, prodding and probing of bankers by the Hayne royal commission that is due to issue an interim report later this year.
These examples have also caused people to continue questioning what the Australian Securities and Investments Commission is doing in chasing down banks behaving badly.
Spare a moment’s thought, however, for investigators unpicking what are often intricate webs of both publicly visible and more clandestine activities.
Disassembling a transaction or series of transactions so that it is clear what and how many offences might have been committed by which party takes time. You need reliable evidence of wrongdoing for court proceedings.
The forensic analysis required is painstaking. It would blow the mind of the average punter if they were exposed, for example, to the mountain of material relating to internal controls, risk management and the IT systems of the CBA or another financial institution.
These unseen folks are the heroes of the results we are now seeing writ large in the media. What outsiders do not see is the patience, diligence and determination needed to get ‘heads on spikes’.