Australia to create compensation fund for bad finance advice

CANBERRA, Australia (AP) — The Australians government on Monday agreed to create a compensation fund for people who lost money from bad financial advice and to set rules to help drought-stricken farmers avoid bank foreclosures.

A government-commissioned inquiry into misconduct in Australia’s banking and financial services industry found widespread misbehaviour that often went unpunished.

The report from the yearlong inquiry that was made public on Monday referred 24 incidents of misconduct to regulators for further investigation and to consider potential civil or criminal charges against executives and corporations, including most major banks.

The government agreed with a report recommendation to establish a fund of last resort, paid for by industry, for individuals and businesses that have won court judgments against financial service providers over the past decade but have never received the damages owed for their losses.

Financial advisers were most likely to fail to pay compensation.

Almost 300 people stand to receive 30 million Australian dollars from the fund, the government said.

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