(Reuters) - Australia’s corporate regulator said on Tuesday it has filed a civil lawsuit against Commonwealth Bank of Australia’s (CBA.AX) pension unit for deceptive product communication, in a case that follows a government-ordered inquiry into the financial sector.
The Australian Securities and Investments Commission said in a statement that product communication by Colonial First State Investments between March 2014 and August 2016 hindered customers of the FirstChoice Fund from transitioning to the cheaper MySuper fund.
“It is notable that a total of 8,605 members provided an investment direction keeping them in the existing product,” ASIC said.
The Australian government in 2014 ordered operators of pension funds, known as superannuation funds in Australia, to move customers with default investment options to the cheaper and simpler MySuper scheme.
The MySuper fund was designed as a part of a government-mandated scheme to provide workers with an economical pension fund, that could be run by investment managers as trustees.
The regulator added that the court would determine the penalty on the charges based on submissions made by both parties.
CBA wasn’t immediately available for comment.
Reporting By Rushil Dutta and Rashmi Ashok in Bengaluru; Editing by Kim Coghill and Sam Holmes