It is the cheat sheet at the centre of the Macquarie Private Wealth scandal that the millionaires' factory and the corporate regulator, the Australian Securities and Investments Commission, refuses to confirm or deny exists.
Fairfax Media has obtained a copy of the Penske File, named after the folder of documents on which the Seinfeld character George Costanza pretends to work. The Macquarie folder contained answers to exams its advisers are required to take annually in order to keep their professional accreditation up to date.
Fairfax Media can reveal a version of the controversial Penske File has been barcoded and scanned into ASIC's database. The file includes more than 30 cheat sheets showing the answers to questions on topics ranging from agribusiness schemes and margin loans to advising clients whose relationships are breaking down. Some pages have handwritten corrections to assist advisers.
When told that Fairfax Media had seen a copy of the file, Macquarie spokeswoman Lisa Jamieson said "if it does exist", Macquarie encouraged Fairfax Media "to provide the document to Macquarie and ASIC so that it can be properly investigated".
ASIC is understood to have had a copy of the cheat sheets circulated to some advisers in MPW's open-space, hot-desk offices since 2012. ASIC refused to confirm or deny whether it had a selection of cheat sheets from MPW, but said in a statement that "allegations of cheating and irregularities around adviser training was one the factors that led ASIC to impose the enforceable undertaking". It said it had a "range of material" relating to the issue of an allegation of cheating by Macquarie advisers on exams.
The existence of the file is believed to have been one of the triggers for an investigation into Macquarie that later resulted in an enforceable undertaking.
Macquarie entered an enforceable undertaking in January last year, more than two years after ASIC first became aware of the extent of misconduct in Macquarie Private Wealth, which includes the misclassification of many clients as sophisticated investors and poor record-keeping.
A Fairfax investigation revealed that ASIC found problems with the treatment of self-managed super funds, recent file notes that referred to months-old transactions and forms that were not properly filled out.
ASIC has confirmed there had been an improvement in the standards of record keeping over the course of the two-year enforceable undertaking. However, it is believed problems with missing documents and inadequate records of advice remain. With four months left of the enforceable undertaking, there is still a long way to go.
Macquarie still seems to lack information on its own customers. It has sent letters to dead people as part of its mailout to 160,000 current and former clients who may have received shoddy financial advice. It also sent letters to some people who had simply transacted business, such as share trading, with Macquarie, but where the advice was provided by a non-Macquarie financial planner.
The whereabouts of the Penske File has been shrouded in mystery. ASIC deputy chairman Peter Kell earlier this month denied at a parliamentary joint committee hearing that the regulator had mislaid its copy of the crucial document. His denial followed a question put to him by Senator John Williams that the "Penske File was copied and given to an ASIC officer, and that it has been lost".
At the same hearing, Senator Williams asked ASIC if the Penske File existed – a question Mr Kell did not answer. "We have a range of material relating to the issue of an allegation of cheating by Macquarie advisers on exams," Mr Kell said. "We have an ongoing investigation in that area, so I would prefer not to go into a lot of detail publicly about it."
Macquarie has repeatedly avoided answering direct questions about its advisers cheating or the existence of the Penske File. In a statement on August 3 it said: "With regard to the unattributed claims made about circulation of answers to competency examinations by management, Macquarie has examined the claim and found no evidence of it." On August 17 another set of questions were sent to Macquarie and it again avoided answering the question, instead preferring to talk about Macquarie's work on adviser training, including "supervised compliance knowledge assessment for advisers and the implementation of external compliance training".
