Financial Services firm IOOF has rejected claims of widespread corporate misconduct following claims of serious wrongdoing among its staff.
The company is fronting a senate economic committee inquiry on Tuesday into the financial advice industry, sparked by recent media reports of alleged corporate breaches at IOOF.
According to the media reports, IOOF is said to have previously investigated misconduct within its business, including allegations of insider trading and cheating on training exams, but failed to always notify the corporate regulator.
Last month, IOOF hired accounting giant PwC to review its regulatory breach reporting policy and procedures within the firm’s research division, where the breaches are alleged to have taken place.
Addressing Tuesday’s inquiry, IOOF managing director Christopher Kelaher defended the company’s compliance culture.
“These allegations have caused great distress to our investors, shareholders and the nearly 2000 of our staff across Australia,” Mr Kelaher told the committee.
“I’m confident I can confirm to you and the broader community that our company has an extremely strong compliance culture.
“Any claims of widespread wrongdoing have no basis on fact.”
He said the allegations centred largely around the conduct of the equity research team, currently made up of nine staff.
“The issues raised were historic, they were all identified internally and are certainly not indicative of any systemic failure,” he said.
“Each matter has been thoroughly investigated and where appropriate remedial action has been undertaken.”
The firm has previously said that most of the matters raised by Fairfax news reports had been addressed by thorough internal and board reviews, notifying industry regulators, ongoing checks of compliance measures and controls, employee education and independent investigation.
Mr Kelaher said an allegation of frontrunning – an illegal stockbroking practice – was investigated in 2009, but not substantiated.
“No insider trading has been detected, no short selling activity identified,” he said, adding that PwC had been engaged in late 2014 to investigate possible frontrunning at the company.
“These independent accountants have confirmed that no frontrunning had taken place between 2008-09 and 2014,” he said.
Mr Kelaher denied suggestions the company was in crisis mode, but conceded the company’s share price had dipped around 10 per cent since late June.
“The market goes down and the market goes up,” he said.
The inquiry comes amid fresh Fairfax reports that IOOF paid $2.8 million in compensation to 57 customers of its authorised financial planners over the past two years.
In its evidence, ASIC Commissioner Greg Tanzer said the corporate watchdog was looking at alleged breaches at the company.