Australian Bank Sued聽Over聽Banned聽Commissions

New Bank of Canada Governor Says COVID-19 Will Leave Lasting Changes on Economy

OTTAWA—Canada’s top central banker says there will be long-term economic damage from the COVID-19 pandemic as the country charts a “prolonged and bumpy” course to recovery. In his first speech as governor, Tiff Macklem says the central bank expects to see growth in the third quarter of this year as people are called back to work and households resume some of their normal activities as restrictions ease. But he warns that Canadians shouldn’t expect the short and sharp economic bounce-back expected over the coming months to last. The combination of uneven reopenings across provinces and industries, the unknown course of consumer confidence, and unemployment rates will “likely inflict some lasting damage to demand and supply,” Macklem says in a speech Monday. He said ongoing physical distancing rules may mean workplaces can’t…

SYDNEY/BENGALURU鈥擜ustralia’s corporate聽regulator聽filed a lawsuit against No. 1 lender Commonwealth Bank of Australia, accusing it of improperly collecting commission to sell the products of its聽pension聽arm聽to hundreds of thousands of customers.

The Federal Court civil suit, which was made public on Tuesday, accused the bank and its聽pension聽unit, Colonial First State Investments Ltd, of a scheme where the bank took commission to sell products for its subsidiary from 2013 of 2019, a聽banned聽practice known as conflicted remuneration.

The lawsuit comes at a sensitive time for聽CBA聽and Colonial, given the bank has agreed to sell 55% of the unit to private equity giant KKR & Co Inc. for $1.7 billion as part of a broader simplification drive across the industry.

CBA聽sold the聽pension聽product to about 390,000 of its customers in branches and online, amassing more than A$22 million in fees, the lawsuit said. Australia has outlawed arrangements where one financial entity sells the products of another for fees without explicitly disclosing the relationship.

The practice came into the spotlight in a 2018 inquiry into financial sector misconduct.

The lawsuit is the second from the聽Australian聽Securities and Investments Commission (ASIC) against聽CBA聽this year in relation to allegations aired at the inquiry, a sign that it continues to gnaw at the industry long after the inquiry ended.

“This proceeding reflects the ongoing commitment by ASIC’s Office of Enforcement and its Royal Commission Litigation Program to bring the Royal Commission’s referrals and case studies to litigation when appropriate,” said ASIC Deputy Chair Daniel Crennan in a statement.

The聽regulator聽said it was seeking unspecified fines from聽CBA聽and its subsidiary, adding that each contravention attracts a maximum fine of $1 million. The lawsuit did not say how many breaches it was alleging.

CBA聽said it was reviewing the lawsuit, without commenting further.

Reporting by Byron Kaye in Sydney and Shruti Sonal in Bengaluru

Focus News: Australian Bank Sued聽Over聽Banned聽Commissions

Germany Condemns Weekend Violence, Looting in Stuttgart

German Chancellor Angela Merkel and the country’s top security official on June 22 decried an outburst of violence at the weekend in the southwestern city of Stuttgart, where hundreds of people attacked stores, vehicles, and police officers following a stop-and-search for drugs. Authorities say 24 people were arrested over Saturday night’s unrest and 19 police officers were injured. Merkel’s spokesman said the scenes “were abhorrent and must be strongly condemned.” “Anyone who takes part in such outbreaks of violence, brutally attacks police officers, and destroys and plunders shops cannot in any way justify it,” Steffen Seibert said Monday. Seibert thanked police officers nationwide, saying they “should know that the German government and millions of people stand behind you.” Interior Minister Horst Seehofer, who called for “swift and tough” punishment of…