Significant and systematic failures at two stockbrokers, one owned by CBA, meant customers were overcharged for almost a decade, a judge has found.
In a decision delivered on Tuesday, Justice Wendy Abraham ordered the firms pay a total of $27.12 million in penalties after countless traders were affected by failures at both CommSec and AUSIEX.
"The number, breadth and duration of the reported conduct when viewed in totality is significant and indicates the entities did not have adequate systems and processes in place to ensure compliance," the Federal Court judge wrote.
"The conduct is properly characterised as being extensive and systematic, occurring over an extended period of time, which affected multiple aspects of the businesses of both CommSec and AUSIEX."
Between August 2010 and June 2020, the Commonwealth Bank of Australia-owned CommSec breached a number of financial laws, including charging incorrect brokerage fees.
AUSIEX, formerly known as CommSec Adviser Services, engaged in similar conduct from May 2010 to November 2019. Japan-based Nomura Research Institute completed its acquisition of AUSIEX in May last year.
Justice Abraham approved the $20 million in penalties to CommSec and $7.12 million to AUSIEX agreed between the two stockbrokers and the Australian Securities and Investments Commission, which filed the lawsuit in March 2021.
"(Each penalty) carries with it a sufficient sting to ensure that the penalty amount is not such as to be regarded by the parties or others as an acceptable cost of doing business," she wrote.
Both CommSec and AUSIEX were also ordered to commence detailed programs to ensure compliance in the future.
