This week, ASIC deputy chair Peter Kell replies to the critics.

Comments (5)

Penny Russell :

03 Aug 2013 8:38:15am

From personal experience ASIC may be a well meaning organisation, but in reality is a toothless tiger at best, and a bit scared of the Big End of Town at worst.
Luckily the pension keeps us fairly comfortable, but inept advice from a Commonwealth Bank advisor, and separately, dubious activity with a couple of ASX stocks, (which ASIC and the ASX refuse to investigate despite highly collated evidence) are the reason our savings / investments dissolved.

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  OK :

  03 Aug 2013 12:47:41pm

  Why does ASIC refuse to investigate the sub-prime situation with australian banks?

   

  • Lisa M :

    26 Aug 2013 1:25:57pm

    Good question.

• Victor Bien :

  03 Aug 2013 9:59:55pm

  I'm inclined to accept that mounting effective cogent legal cases against offenders is a difficult call. In particular to tackle big companies who have deep pockets to hire the best advocates (lawyers) makes any prospective battle pretty daunting.
  That would be a reason why ASIC targets little guys more than the big ones because the little guys are easier to beat!
  The more fundamental problem is that in a free society "interests" large and small *legally* don't have to be cooperative with the wider society and economy. All they have to do is work within but around the intent of the law. We may wish them to morally oblige but the reality is that many or perhaps most (I don't have any statistics) don't. They can and do look for all manner of legal loop-holes and other schemes to avoid their obligations. We only have to think of massive and small tax avoidance (as distinct from "evasion") schemes to get the picture.
  If government don't fund ASIC or other such outfits enough (to keep the budget in surplus?) this is tantamount to allowing the big end of town to get away with all manner of means to rip off the general public. It is too hard and costly to control them. This is a price we all have to pay if there is a general moral degradation - a general degradation in "civil society" a topic covered last week.
  There is just so much outfits like ASIC can do. There is no substitute for buyer beware. It pays for everyone to be more financially literate; more than that - to be financially "street smart". You'd be then able to see through the bluff of self-seeking "financial advisors", even under the endorsement of a big name bank, listen politely but do nothing to follow through that person's "advice" and go elsewhere.
   

• Lisa M :

  26 Aug 2013 1:24:06pm

  Peter Kell's explanation sounds good. In reality ASICs involvement was too little, too late. One of many similar complaints about ASICs operations over many years. This is nothing new.
  Did ASIC actually do what they said in Kell's complex explanation? Or did they 'reverse engineer' the story to fit the desired answer and try to soothe the public?
  Re Gillespie: why didn't ASIC suspend his FP license immediately pending investigation?
  Many complaints have been lodged with ASIC and not dealt with properly regarding fraudulent conduct by Bank staff. Some of the ASIC replies suggest that they haven't read the submission or evidence properly. It also looks like ASIC says, this year we're working on X - does this complaint fit our focus area? If not it's just too bad for the complainant as some of the ASIC reply letters are inane and inappropriate. Here's hoping 2014 is designated as the year ASIC target Bank Fraud including Fraud Loans!
  ASIC have stated that their job is to protect the markets. No mention of consumers. There is a fundamental conflict of purpose in trying to do both. Why not put individual consumer complaints in the hands of a unit that could focus on timely and appropriate responses?
  ASIC have also said in the past that they don't really handle consumer complaints. What do they do then? They harvest information from the complaints, act accordingly and repeatedly complainants have found they can't retrieve lost investments as the company has gone to bankruptcy and/or liquidation where the investors money is used up in fees and processes. This is not satisfactory for investors. Do ASIC understand anything really about the way investors feel about this?
  There is a strong case for separating ASICs corporate regulatory role from consumer protection. Australian and overseas investors would have far more confidence in a system where a Consumer Protection Authority was looking after that side. As it is there are too many sleepless nights from investing under the "care" of ASIC, who may or may not tell consumers that they can see a problem upahead! Geraldine, this interview has not allayed my fears over investment safety - quite the reverse! And articles I've read of the reactions of overseas investors are much the same. It's bad for Australia's reputation to permit ASIC to continue on as "consumer protector" when this is not true consumer protection.
  I agree with Sen Williams: ASIC have been a placeholder regulator and as such have done considerable harm than good while misleading Australian and international investors.
  The relevant politicians and a succession of Govt ministers (from 1998 to date) must also share the blame for the woeful ROI we've had from our "investment" and faith in the watchdog that failed to warn us, over and over again.

http://www.abc.net.au/radionational/programs/saturdayextra/asic---right-of-reply/4858828