Westpac detects huge potential fraud, bank to pay compo for deficient financial advice to share traders

Westpac has uncovered “sophisticated and externally perpetrated” potential fraud, estimated at about $200m after tax, and has kicked off court action in response.

The major bank said on Friday it had started Federal Court proceedings against Forum Finance over a portfolio of equipment leases with Westpac customers it had arranged, which were referred to Westpac’s Institutional Bank.

Police, the Australian Securities and Investments Commission and Australian Prudential Regulation Authority had been notified, with the extent of any loss dependent on the outcome of its investigations and recovery actions underway, Westpac said.

“At this stage it appears no Westpac customer has suffered a financial loss,” the bank said.

The bank has obtained asset freezing and search orders to preserve available assets and relevant information.

Chief executive Peter King said it was a complex issue.

“At this preliminary stage, the potential fraud is sophisticated and appears to have been perpetrated externally,” Mr King said.

By Rebecca Le May, The West Australian, 2 July 2021

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Source: riskscreen.com