Greg Kilminster
Head of Product - Content
ASIC issues scam report for banks
A recent report by the Australian Securities and Investments Commission (ASIC) reveals that scams continue to significantly affect Australians, with $232 million in scam transactions reported by banks outside the four major institutions during the 2022–23 financial year. The review highlights the need for improved anti-scam practices among smaller banks, echoing the findings of an earlier report on the major banks.
Some context
In 2023, ASIC’s initial report on the four major banks exposed the immaturity of their scam prevention strategies. Building on this, the latest report extends the scrutiny to 15 smaller banks, revealing similar shortcomings in scam detection, prevention, and response practices. Despite some progress, these institutions still lag in fully implementing effective measures, reflecting a broader industry challenge.
Key takeaways
- Significant scam losses: Of the $232 million in scam transactions, only 19% were detected and stopped, with a mere 20% of lost funds recovered. Customers bore 96% of the losses.
- Governance gaps: Many smaller banks lack comprehensive strategies for dealing with scams, often focusing more on fraud than scams specifically.
- Inconsistent practices: There is wide variability in how banks manage scams, with some showing advanced practices while others are still underdeveloped.
- Customer experience issues: Poor handling of scam reports, inadequate resourcing, and lack of end-to-end customer support were common, leading to negative outcomes for victims.
- Data challenges: Inconsistent data reporting and poor-quality data hindered effective scam response, suggesting a need for better systems.
Next steps
ASIC urges all banks to prioritise scam prevention, detection, and response, using the findings from both the initial and latest reports as benchmarks. The report also stresses the importance of continuous investment in anti-scam infrastructure and calls for improved industry-wide collaboration. With scams evolving rapidly, it is essential that banks, regardless of size, enhance their efforts to protect consumers and adapt to the increasingly sophisticated threat landscape.
ASIC will continue to monitor progress, engage with the major banks, and expand its review to include other financial institutions, ensuring that the industry remains vigilant in combating scams.
Click here to read the full RegInsight on CUBE’s RegPlatform
US and China meet to discuss financial services
The United States and China held their fifth Financial Working Group (FWG) meeting in Shanghai on 15-16 August 2024. Senior officials from both nations discussed a broad range of financial and economic issues, underscoring the continued efforts to maintain dialogue amidst complex global challenges.
Some context
This meeting is part of ongoing efforts to deepen financial cooperation between the world’s two largest economies. The FWG, established in September 2023 by US Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng, aims to enhance communication on key financial stability issues and operational resilience.
Key takeaways
- Technical exchanges: The meeting reviewed outcomes from recent bilateral technical exchanges on topics such as central bank climate scenario testing, operational resilience, and Global Systemically Important Banks (G-SIBs) resolution.
- AML cooperation: A significant focus was on anti-money laundering (AML) practices, including discussions on beneficial ownership and potential updates to China’s AML laws.
- Private sector engagement: The meeting featured a roundtable with private firms from both countries, focusing on climate financing, transition planning, and carbon markets.
- Coordination agreements: The US Treasury and the People’s Bank of China (PBOC) exchanged letters to bolster coordination during financial stress, aiming to reduce uncertainty through better information sharing and crisis management frameworks.
Next steps
The FWG will continue its regular meetings and technical exercises to further strengthen bilateral financial cooperation. Both sides reaffirmed their commitment to ongoing dialogue, reflecting a shared understanding of the importance of stability in the global financial system.
Click here to read the full RegInsight on CUBE’s RegPlatform
Icahn Enterprises founder faces SEC charges for violating disclosure obligations
The Securities and Exchange Commission (SEC) has charged Carl C Icahn and his publicly traded company, Icahn Enterprises L.P. (IEP), for allegedly failing to disclose information regarding Icahn's pledges of IEP securities as collateral to secure personal margin loans worth billions of dollars.
The SEC's orders found that IEP violated Section 13(a) of the Securities Exchange Act of 1934 and Rule 13a-1. Additionally, Icahn violated certain beneficial ownership reporting provisions of the Exchange Act.
To settle the SEC’s charges, IEP and Icahn have agreed to pay $1.5 million and $500,000 in civil penalties, respectively.
Osman Nawaz, Chief of the SEC Enforcement Division’s Complex Financial Instruments Unit (CFIU), stated, "The federal securities laws imposed independent disclosure obligations on both Icahn and IEP. These disclosures would have revealed that Icahn pledged over half of IEP’s outstanding shares at any given time. Due to both disclosure failures, existing and prospective investors were deprived of required information."
Click here to read the full RegInsight on CUBE’s RegPlatform