Sherwin scam prompts bank account review
A FINANCIAL planning fraudster's twisted use of clients' Bank of Queensland accounts has prompted a widespread watchdog review of other institutions.
The review "found that banks could do more to manage the risks to customers associated with third party access to money in customers' accounts", the Australian Securities and Investments Commission said on Thursday.
Brisbane-based financial planner Brad Sherwin, head of Sherwin Financial Planners, was jailed last year over his role in a $60 million Ponzi scheme.
Clients had life savings wiped out, with money shuffled by Sherwin between various BoQ accounts overseen by fund manager DDH Graham.
Clients subsequently sued BoQ and DDH, and both entities, while denying wrongdoing, settled the lawsuit by paying $6 million each.
ASIC said it had investigated BoQ's accounts at the time.
"BoQ made improvements to their systems and investors took independent action to recover their funds so ASIC took no further action in relation to the investigation," a spokeswoman said.
BoQ refused to comment.
ASIC said five other banks with adviser-operated accounts were reviewed: Bendigo and Adelaide Bank, CBA, Macquarie, NAB and Westpac.
"ASIC's review did not identify concerning levels of fraud," it said.
Banks involved in the review had agreed to improvements, ASIC said.
This included "better monitoring of the advisers' use of these accounts and their transaction requests, and investigating any suspicious requests".
Another reform was sending follow-up communications to customers after an account is opened with details of any authority given to their adviser to operate the account. In the Sherwin case, victims complained they were never informed of accounts' existence.