ASIC fell short on CommFP review, says law firm
The Australian Securities and Investments Commission's (ASIC) investigation of the Commonwealth Financial Planning (CommFP) scandal lacked the resources and scope to properly compensate all affected clients, a law firm believes.
In a submission to the inquiry into the performance of ASIC, Maurice Blackburn — the firm which represented 13 CommFP clients in negligence and breach of statutory duties civil cases — said ASIC's retrospective review less than adequately assessed client losses.
The firm was referring to the actions of a number of rogue financial planners, including Don Nguyen, who provided inappropriate financial advice to clients between 2006 and 2009, resulting in losses of up to $2.5 million.
The ASIC investigation required CommFP to identify and compensate clients who suffered financial losses, which involved analysis of files, "some of which were tainted with the questionable practices of Mr Nguyen", the firm said.
Maurice Blackburn said ASIC also did not have the resources to conduct a review of the necessary scale to compensate the hundreds of affected clients.
"To have such a review in place would have been a big undertaking requiring very significant resources to support the independent expert to examine the portfolios … To the best of our knowledge, this did not occur," it said.
"Accordingly, we have serious reservations as to whether clients of CommFP and Mr Nguyen were properly compensated, particularly those who were not represented in their dealings under the review program," it concluded.
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