The performance of the Australian Securities and Investments Commission (ASIC) will be challenged in a Senate inquiry, following accusations of incompetence and inaction.
Nationals Senator, John Williams, successfully moved for the inquiry to be held, with the support of Labor Senator, Doug Cameron, and Greens leader, Christine Milne. Senator Williams said he was fed up with what he termed ASIC’s “incompetence in some areas”, accusing the regulator of failing to act despite having evidence of wrongdoing “presented to it on a plate”.
The inquiry will be conducted by the Senate Economics References Committee, chaired by Senator David Bushby. Under the Terms of Reference, the performance of ASIC will be examined, with particular reference to:
- ASIC’s enabling legislation, and whether there are any barriers preventing ASIC from fulfilling its legislative responsibilities and obligations
- The accountability framework to which ASIC is subject, and whether this needs to be strengthened
- The workings of ASIC’s collaboration, and working relationships, with other regulators and law enforcement bodies
- ASIC’s complaints management policies and practices
- The protections afforded by ASIC to corporate and private whistleblowers, and
- Any related matters
The push for an inquiry follows a heated Senate Estimates Committee hearing earlier this month, in which Senator Williams accused ASIC of failing to act on a tip-off about former Commonwealth Financial Planning (CFP) employees. Senator Williams told the SEC hearing that he understood it had taken 16 months, and numerous emails from whistleblowers, for the regulator to take action against CFP, in particular, former adviser Don Nguyen (see: Enforceable Undertaking for CFP).
“Quite simply the ASIC representatives stonewalled,” said Senator Williams of the response from ASIC Deputy Chairman, Peter Kell, during the hearing.
“Asked why they hadn’t acted earlier on whistle blower complaints, they spoke about the compensation they had obtained for clients of a disgraced financial planner.
“But they would not explain why it took them 16 months to act on complaints,” Senator Williams said.
Commenting on the launch of the investigation on Senator Williams’ website, one supporter wrote:
“As someone personally impacted by ASIC’s inertia and plain unwillingness to do their jobs in investigating and taking action against individuals readily willing to commit fraud, it is indeed time that they were made accountable for their actions (or lack of them).
“It is high time that the Australian public were made well aware that non-existent regulation of both the country’s financial services industry specifically, and corporate environment generally, makes the so-called regulator the world’s laughing stock…
“I, for one, look forward to submitting my experiences.”
Submissions to the inquiry are due by 21 October 2013. The Committee will hand down its report on 31 March 2014.
