An Australian court has ordered NULIS Nominees Limited (NULIS) and MLC Nominees Pty Ltd (MLC Nominees), two entities of National Australia Bank’s (NAB) wealth management division, to pay a fine of AUD 57.5 million (around $41.87 million).
Both of them were involved in making false and misleading representations to superannuation members about various charges and associated service fees.
Monday’s announcement detailed that MLC Nominees misled around 220,000 members of MasterKey Business Super (MKBS) and MasterKey Personal Super (MKPS), two divisions of its MasterKey Product, from September 2012 to June 2016, and deducted around AUD 33.6 million in fees ($24.47 million).
Furthermore, the entity, along with NULIS, deducted approximately AUD 71.9 million (around $52.36 million) as Plan Service fees from around 457,000 members between September 2012 to September 2018. All these members were charged for the services of Plan Advisors, whereas none received such services.
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One of the Largest Civil Penalties in the Country
The Australian Federal court found the two entities breaching the ASIC Act and Corporations Act, and additionally pointed out their non-compliance with other financial services laws.
Out of the total fine, MLC Nominees will have to pay AUD 49.5 million ($36.05 million) and AUD 8 million ($5.83 million) have been imposed on NULIS. The Australian Securities and Investments Commission (ASIC) will receive the proceeds from the civil penalty.
“The penalty imposed by the court reflects the very serious contraventions by MLC Nominees and NULIS and is the largest total penalty yet imposed in a civil action filed by ASIC,” Daniel Crennan QC, the deputy chair at ASIC, said.
“Fees for no service conduct is particularly egregious, having resulted in a substantial financial loss for thousands of unsuspecting consumers. ASIC will continue to bring an enforcement action against this misconduct and other case studies from the Financial Services Royal Commission. This demonstrates our resolve to deliver on the public’s expectation that we hold wrongdoers of all dimensions to account.”