Some 18 months ago, the Sam Dastyari-initiated, and taxpayer-funded, Senate Inquiry into IFL's inner workings made all the headlines.
At the time, all the headlines were baying, "Run, Run! The end is nigh for IFL!"
I thought it would be instructive to look back and review how those events of 18 months ago, have impacted the IOOF's various brands, by having a look at what happened to fund flows since then.
In total, since the Great Scandal of 2015, IFL has enjoyed total fund inflows in excess of $3.32bn, with only one quarter experiencing modest net outflows.
In summary, clearly the IFL business model has been completely unaffected by Senator Dastyari's churlish and attention-seeking waste of taxpayer money.
I think this speaks volumes for the resilience of the IFL business model and its brands and it just goes to show what a sensationalist beat up the whole saga was.
And in the interim, that same sanctimonious senator has been embroiled in a scandal of his own, involving him accepting un-authorised and dubious payments from certain Chinese parties.
It's simply laughable.
For context, below are some comments I posted at the time, as well as a transcript, aired in August 2016 on ABC Radio's current affairs programme, The World Today:
"As I expected all along, the Senate Inquiry into the Great IOOF Financial Services Scandal has got nothing, other than some political air time (which is possibly what it’s real objective was, anyway)
A Senate Inquiry has been commissioned largely on the basis of some lazy journalism that took the word of a single individual (the flatteringly labelled "whistleblower") of a few events that happened 5 years ago inside one office within one business unit inside one division of a large organisation employing thousands of staff who handle millions of transactions each year for hundreds of thousands of clients, and the journalist took this one piece of the 50,000 piece jigsaw puzzle and extrapolated all sorts of cataclysmic misfeasance on a systemic basis throughout the entire enterprise.
And the mechanism by which this individual sought to "blow the whistle" was to prod the chairman's LinkedIn account.
No conventional form of contemporary correspondence such as e-mail, no letter, no phone call.
Just an LinkedIn message.
And to just one company executive.
Not to HR, not to the Compliance Department, Not to the CEO.
Just the chairman.
Via LindedIn.
Quite laughable.
He may as well have despatched a runner carrying a parchment in a cleft stick. Or a carrier pigeon, maybe.
And now because PWC didn't give the answer the Commission sought, it is PWC's integrity that is now brought into question by the Commission’s chairman.
As if PWC would – given the high media profile of this situation – be so dumb as to risk its reputation by willingly and actively obfuscating in presenting a report that was intentionally dodgy, when such a report was certain to be subject to the glare of media scrutiny.
What a waste of taxpayer money this Commission is, for little more than some political grandstanding to cater to the ambitions of a certain Labour senator."
From the ABC's radio current affairs programme, The World Today:
ELEANOR HALL: The chairman of the financial services firm IOOF has come under pressure at this morning's Senate hearings to explain the scandal over allegations of insider trading and faulty research at his company.
Roger Sexton is now defending a report his company commissioned into the allegations with the inquiry's chairman calling it a "whitewash".
Even before today's hearings began, Labor Senator Sam Dastyari accused IOOF of potentially misleading the inquiry by relying on the report.
Our business editor Peter Ryan has been watching this morning's senate hearing and he joins us now.
So Peter how is IOOF's chairman explaining the inconsistencies between the allegations and the report which gives the firm an "all clear"?
PETER RYAN: Well this is a critical matter for the committee because, just before the scandal became public back in June, IOOF commissioned the accounting firm Price Waterhouse Coopers, or PWC as they like to be known, to investigate the allegations but there were strict guidelines such as not talking to the whistleblower.
That report has just been released; it broadly clears IOOF of any breaches such as insider trading or front running or writing dodgy research reports.
IOOF's chairman Dr Roger Sexton is backing the report and this morning he rejected the allegations, but this morning he came under heavy questioning from the committee's chairman Labor Senator Sam Dastyari, who's called into question the reputation and credibility of PWC and the tight parameters for PWC's investigation.
SAM DASTYARI: PWC state they did not have access to interview the employee who had made the allegations.
They did not have access to interview or directly request information from staff within the research department.
They did not have the capacity to interview the person the allegations were made against.
They did not have data information from client order books for details of other bridges, trades, and securities.
They did not have access to computer hard drives, and electronic devices and they did not consider trading history prior to 2008.
They did not consider other allegations made by the employee and they did not have access to other trading facilities through another broker. I mean, look, I appreciate this is a report based on the scope within which was given to PWC. Is this an extensive account of the matter?
ROGER SEXTON: At the time this matter is being prosecuted as a fair work matter.
SAM DASTYARI: Then why won't you talk to the employee?
ROGER SEXTON: I think if you read the terms of reference in the second part, it does require PWC to speak to the employee, in part 2. At the time it was being treated as a fair work matter.
SAM DASTYARI: So you're saying the subsequent inquiry, so subsequent report that is currently being produced by PWC has a broader terms of reference than this inquiry?
ROGER SEXTON: Correct.
SAM DASTYARI: Okay well, we don't know what those terms are. You obviously do; we don't.
ROGER SEXTON: When the report is provided you'll see the terms of reference in the findings of the report.
ELEANOR HALL: That's IOOF chairman Doctor Roger Sexton being questioned by teh Senate committee chairman Labor Senator Sam Dastyari
Now Peter there's also some confusion about who knew what and when in relation to this scandal; was Roger Sexton able to shed any light on that?
PETER RYAN: Well the whistleblower who raised these allegations was later sacked by IOOF; this goes to the issue of whistleblower protection in companies.
But Dr Sexton appeared to question the whistleblowers tactics in raising the issue and said sending a confidential alert via social media to his LinkedIn account meant there was no way he'd be immediately brought into the loop.
SAM DASTYARI: You're aware that the whistle blower had tried to contact you as the chairman of the board prior to this time?
ROGER SEXTON: As chairman I would like to clarify that, because it's very important and a lot of misinformation and inaccuracies have been in the press about that.
The whistleblower, if we're calling him that, apparently sent an email to me at my LinkedIn address. I don't use Linked In; it would be like throwing a message in a bottle and putting it in the ocean, chairman. That message is still drifting around somewhere in the ocean, because I never got it.
ELEANOR HALL: That's IOOF chairman Dr Roger Sexton being questioned by committee chairman Labor Senator Sam Dastyari
Now Peter, PWC wrote this report into these allegations. To what extent is this line of Senate inquiry damaging its reputation?
PETER RYAN: Well PWC will be making their case later this afternoon when this inquiry continues. But of course they are under a lot of pressure at the moment given that their credibility is on the line, given these allegations that are being made by Senator Dastyari.
But they do have one thing, and this is something that is used by all advisory firm, and it's called disclaimers that come just before the executive summary, where they say no responsibility is assumed; no representations are made about the accuracy or completeness of reports.
So all this comes as part of the broader scandal in financial advise, which has engulfed the likes of the NAB, the Commonwealth Bank and Macquarie Private Wealth.
ELEANOR HALL: Peter Ryan our business editor, thank you
IFL Price at posting:
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