"Who do you think you f---ing are? ... If you try to get me, I'm going to throw you under the f---ing bus," National Australia Bank's star financial planner Graeme Cowper told a compliance manager who was conducting a random compliance check of some of his customer files.
The strongly worded threats emerged as evidence as part of the legal action Cowper launched against Fairfax Media (and myself) and the ABC over an expose of poor behaviour in financial planning focused mostly on NAB.
More BusinessDay Videos
- Video duration
- 01:49
Inquiry heats up
Inquiry heats up
NAB boss Andrew Thorburn has been questioned at the parliamentary banking inquiry over targeting customers and the financial planning scandal.
Up Next
Adani mine project moves forward
- Video duration
- 01:51
- Video duration
- 01:51
Adani mine project moves forward
Adani mine project moves forward
Jobs, regional investement, and the battle against climate change... all will benefit, say Premier Annastacia Palaszczuk and Adani CEO Jeyakumar Janakaraj at an announcement in Townsville. Vision courtesy ABC News 24
Up Next
Rates on hold for Christmas
- Video duration
- 01:40
- Video duration
- 01:40
Rates on hold for Christmas
Rates on hold for Christmas
The Reserve Bank has left rates on hold until at least February. Peter Martin explains why.
Up Next
Real estate agents playing vendors for mugs
- Video duration
- 01:50
- Video duration
- 01:50
Real estate agents playing vendors for ...
Real estate agents playing vendors for mugs
You know that apartment oversupply that has been promised everywhere except for Sydney? It's happened. Michael Pascoe comments.
Up Next
RBA staying cool as the heat rises
- Video duration
- 01:59
- Video duration
- 01:59
RBA staying cool as the heat rises
RBA staying cool as the heat rises
The final Reserve Bank board meeting of the year takes place at a magical time in Sydney, where the city gives itself over to sundry before Christmas. Michael Pascoe comments.
Up Next
Asia's second-richest man's bid for Aussie infrastructure
- Video duration
- 01:19
- Video duration
- 01:19
Asia's second-richest man's bid for ...
Asia's second-richest man's bid for Aussie infrastructure
Cheung Kong Infrastructure has made a $7.3 billion bid for Duet Group, after losing a bid for Ausgrid only four months ago.
Up Next
The Australian economy: the great unknown
- Video duration
- 03:28
- Video duration
- 03:28
The Australian economy: the great unknown
The Australian economy: the great unknown
If everything goes to plan, we should see Australian growth around 2.8% in 2017, but there are a number of risks in both directions. (This video was produced in commercial partnership between Fairfax Media and IG Markets)
Up Next
Princess Cruises to pay $53 million for ocean pollution
- Video duration
- 01:21
- Video duration
- 01:21
Princess Cruises to pay $53 million for ...
Princess Cruises to pay $53 million for ocean pollution
Federal prosecutors say the payment represents the largest-ever criminal penalty involving deliberate pollution by a ship at sea.
Inquiry heats up
NAB boss Andrew Thorburn has been questioned at the parliamentary banking inquiry over targeting customers and the financial planning scandal.
That case though took on an ironic twist this week when Cowper effectively threw himself under the bus when he pulled the plug on the defamation case halfway into a four-week trial with a jury at the NSW Supreme Court.
In a complete surrender Cowper agreed to pay $200,000 in legal costs to Fairfax Media and the ABC as well as agreeing that a judgment should be made in the media companies' favour.
Related Content
That meant he conceded that Fairfax Media and the ABC were telling the truth when they portrayed him as being so dishonest that he should never be allowed to manage other people's money.
In fact, all the trial served to do was produce evidence that some of his behaviour and misdeeds were far worse than had previously been known.
He retreated from the case on the eve of being cross-examined by Fairfax's lawyers.
This was an important vindication of the specific story and the risks victims took in coming forward not to mention a whistleblower inside the bank.
But what made the victory all the more significant was that defamation cases in this country are becoming increasingly hard to win. The truth isn't always enough.
Cases are expensive to run. They are being increasingly abused by unscrupulous individuals as a means to stop the truth from coming out or as a nothing-to-lose shot at some cash.Â
The manipulation of interlocutory procedures especially the obstruction of pre-trial processes like subpoenas to prevent evidence being gathered, has created a situation where far too many cases are being run with a strategy of keeping important evidence from being put in front of juries. Amid all that judges, too, are coming to grips with the fast-changing modern media.
As the MEAA chief executive Paul Murphy told a room full of journalists on Friday night at the Walkley Awards: "Rich and powerful interests can use an army of lawyers to muzzle legitimate scrutiny. It is high time the defamation regime that operates across the country is reviewed."
Cowper lodged his defamation claim against Fairfax Media in 2015 after a series of articles alleged he had been terminated in 2010 after an internal bank investigation had found file reconstruction and compliance breaches as well as inappropriate advice.
The articles revealed that NAB had filed a breach report to ASIC. This was the bank's way of flagging significant compliance breaches to the corporate regulator in case it wanted to take action. It didn't.
Meanwhile the bank quietly paid out compensation to 53 clients, or about one in nine of Cowper's customers. Unsatisfied, a few clients came forward to Fairfax Media detailing how their lives had been destroyed by his shoddy advice, which had cost them their life savings.
At the time the articles appeared, Cowper was working at AMP. He was suspended, investigated and subsequently let go. He blamed AMP's decision to terminate him on the negative media attention prompting him to sue for damages including lost earnings.
During the course of the trial, headed by Sandy Dawson, SC, and Declan Roche for the defendants instructed by Banki Haddock Fiora's Tim Senior and the ABC's Hugh Bennett, it became clear that Cowper was far worse than had been previously reported.
The trial process also exposed serious shortcomings in how NAB had dealt with him and the absence of the corporate regulator ASIC in doing anything about him. A breach report was filed to ASIC in 2010, the articles appeared almost two years ago and ASIC has been silent.
For NAB, it allowed a man who they clearly knew had done some egregious things to resign. NAB didn't stop there, it gave him a payout and a form letter wishing him all the best.
By allowing Cowper to resign instead of terminating him he was able to move easily into other jobs in the same industry. NAB let down the industry and his clients.
As for ASIC, it appears to have been missing in action for six years. It received a breach report from NAB, had been told about some of his issues, yet sat on its hands, even after a raft of stories came out almost two years ago. It remains to be seen whether it takes any action now.
The Cowper case shows warts and all what has been wrong with this industry for years. It showed that Cowper was on a base salary of less than $80,000 a year but managed to make a fortune, $850,000 one year, from commissions shared between himself and the bank.
He knew he had done the wrong thing but used the law to try to stop it coming out. The industry is trying to fix itself up, but there is a long way to go.
A new national register has been launched, which has been held up by the government as the panacea that will cure the crisis of confidence in the financial planning industry – rather than a royal commission – but it is riddled with flaws.
David Morrison, the Australian of the Year, used the line: "The behaviour you walk past is the behaviour you accept."
It should give a lot of people some pause for thought.
0 comments
New User? Sign up