However, it is a rare example of the Australian Securities and Investments Commission (ASIC) using powers to take criminal action against a major company, which is a weapon the regulator appears more willing to use.
Under the law, the offences CBA committed by “hawking” life insurance through unsolicited calls could not be dealt with through a civil lawsuit. So if ASIC was to take action in the courts it would have to be a criminal case.
One can’t help but think that the ASIC from the pre-Hayne era would have been happy to let CBA compensate customers, but escape without the black mark of a criminal conviction. But this time, it decided not to.
As ASIC deputy chairman Daniel Crennan put it: “It may be a signal to the regulated communities that there is a willingness to employ the criminal consequences that we can pursue, perhaps, more so than we have in the past, in appropriate circumstances.”
In a sign of just how unusual this type of action is, there have only been 13 prosecutions against Australian corporations in the past decade, and only seven of these ended up with convictions.
Some of the big banks, meanwhile, have shown a welcome pragmatism, rather than dragging matters through the courts.
CBA agreed to plead guilty only a month and a half after it was charged, and it is noticeable that under chief executive Matt Comyn it has also agreed to settle allegations involving money laundering breaches and interest-rate rigging.
National Australia Bank last week also settled a royal commission-inspired case against involving a scandal in its home loan “introducer” program.
Although the likely fine CBA faces will be little more than loose change for the banking giant, the maximum penalty would be substantially higher, at almost $11 million, if these offences were committed today.