ANZ hit with $250m fine for widespread misconduct and systemic risk failures

ANZ Group Holdings Ltd (ASX: ANZ) shares are holding up on Thursday despite a significant regulatory development.

At the time of writing, the banking giant's shares are up 1% to $36.40.

This suggests investors have either already priced in the news or are looking past it. So, what's happening?

Federal Court orders record penalties

This afternoon, the Australian Securities and Investments Commission (ASIC) has announced that the Federal Court has ordered ANZ to pay $250 million in combined penalties. This is for widespread misconduct and systemic risk management failures.

According to ASIC, this is the largest combined penalty ever secured against a single entity by the regulator.

The penalties relate to four separate court proceedings spanning both ANZ's institutional and retail banking divisions, which were first announced in September 2025.

What are the penalties?

The $250 million total comprises multiple findings of misconduct.

The Court ordered $135 million in penalties for institutional and markets misconduct connected to the management of a $14 billion Australian Government bond deal, as well as the inaccurate reporting of secondary bond market turnover data. This includes a record $80 million penalty for unconscionable conduct.

A further $40 million penalty was imposed for failures to respond to hundreds of customer hardship notices, in some cases for more than two years.

ANZ was also ordered to pay $40 million for making false and misleading statements about savings interest rates and failing to pay the promised rates to tens of thousands of customers.

In addition, the Court has imposed a $35 million penalty for failing to refund fees charged to deceased customers and for not responding to estate representatives within required timeframes.

Serious misconduct

ASIC Chair, Joe Longo, said the scale of the penalties reflects the seriousness of the misconduct and its impact on customers, taxpayers, and the Australian Government. He said:

The size of the penalties ordered today underscores the seriousness of ANZ's misconduct and its far-reaching consequences for the Government, taxpayers and tens of thousands of customers. ANZ must overhaul its non-financial risk management and put the interests of clients, customers and the public first.

In the bond trading and misreporting matter, ANZ exposed the Australian Government to a significant risk of harm, denied the Government an opportunity to protect itself and the public interest, and mislead the government for nearly two years by overstating bond trading volumes by billions of dollars.

In response to the news, ANZ said:

ANZ is focused on significantly improving its management of non-financial risks across the bank, with a dedicated program of work underway as part of its Root Cause Remediation Plan. In addition, ANZ has established an ASIC Matters Resolution Program within Australia Retail to meet commitments to ASIC to deliver improvements across a number of areas in its Retail division. Both programs of work will be reviewed by Promontory, an independent expert appointed to review and report on progress and delivery of this work.

The post ANZ hit with $250m fine for widespread misconduct and systemic risk failures appeared first on The Motley Fool Australia.

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