- Advertisement -spot_img
Thursday, October 21, 2021

ASIC, less a corporate watchdog, more a lapdog

The end of Australia’s corporate watchdog, the Australian Securities and Investments Commission, under new directives from the federal government has been overcome by tragedy.

A 2014 Senate review described ASIC as “weak, timid and timid”. To be fair, that was before the current leadership of ASIC. Now one can add the evaluation “astonished and confused”.

Last week we got a dose of the double speech by new ASIC President Joseph Longo and Deputy Chair Sarah Court in their “first ever significant media interview” – with the Australian Financial Review.

The pair were asked about ASIC’s commitment to “why not sue?” Approaches recommended in 2019 by the Heine Shahi Commission on Malpractice in the Financial Services Industry.

Following several revelations where the corporate regulator failed to act against illegal behavior, royal commissioner Kenneth Hayne made it clear that when ASIC saw a law broken, its obligation, in deciding on a response, was to ask itself first. “Why not sue”?

“I love litigation,” Longo told AFR. “It’s what I used to do and Sarah is an expert at it.”

But in the same interview Court – ASIC’s enforcement chief – said the why-no-litigation strategy “has its day”.

Regulator DoubleSpeak

Confusion can be expected when a regulator is asked to enforce and refrain from enforcing the law – which is effectively what the federal government submitted to ASIC in a “statement of expectations” last month.

The previous statement issued in 2018 began with acknowledging the “independence of ASIC and its responsibility for regulating market conduct”.

The new statement begins by saying that ASIC is expected to “identify and pursue opportunities to contribute to the government’s economic goals”.



Read more: Frydenberg’s instructions to ASIC throw the Banking Royal Commission under a bus


ASIC accepted the Banking Royal Commission’s why-not-sue recommendation in 2019. But this view of the federal government was underscored last Friday when Longo faced the House of Representatives Standing Committee on Economics.

Committee chairman Tim Wilson described the “why not litigation” approach as binary, mis-led and ridiculous. He also disputed that ASIC was too close to regulated companies, despite overwhelming evidence to the contrary.

Tim Wilson, chairman of the House of Representatives Standing Committee on Economics.
Mick Sicas / You

return to implementable undertakings

Answer Longo and the Court also suggested to the AFR that the ASIC was withdrawing from the recommendation of the Heine royal commission on “enforceable undertakings” – by which criminals enter into a settlement without admission of wrongdoing.

Commissioner Hayne, in his final report, said a regulator might think that using enforceable undertakings is better than taking a company to court.

But that view cannot be formed without first due consideration of the questions of detention, both general and specific. A regulatory response to a violation of the law, which generally and notably, would not result in a more effective regulatory outcome.

However, the Court told AFR:

My own view is that an enforceable undertaking may be perfectly suitable in the right circumstances. Violation notices can be totally appropriate.

The fading effect of the Royal Commission

The notion received is that of an attempt to give some lip service to the royal commission, but also demonstrate allegiance to the federal government.

The federal government repeatedly opposed the royal commission, then backtracked from its commitment to act on all recommendations. What has changed since the royal commission? not much.



Read more: Ideology triumphs over evidence: Morrison government throws ball at banking reform


Last week the Federal Court fined Westpac $10.5 million for deceptive behavior toward members of the Westpac-owned BT Superannuation Fund — a decision stemming from a lawsuit initiated by ASIC in 2016. This is the same BT that was ordered by the Australia Prudential Regulatory Authority two weeks ago. His returns have been poor enough to advise the nearly 500,000 members of his retirement wrap fund that they should leave the fund.

In his ruling, Justice Michael O’Brien criticized Westpac for its failure to correct its compliance failures, delays in compensating customers, and lack of an apology: “Westpac has not expressed regret for the conduct, such Appears to have not taken steps to address compliance deficiencies. And has been slow to put forward a corrective plan.”

At least, though, the ASIC prosecuted Westpac—it successfully pursued an appeal when it lost its first case. What chance would “no-regrets Westpac” have for consumers to get fair results if it didn’t go to court? not much.

Australia’s battered and crippled financial consumers have every right to ask regulators and the government: enforce the law, or get out of the way.

This article is republished from – The Conversation – Read the – original article.

World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
Latest news
Related news
- Advertisement -

Leave a Reply