ASIC hamstrung by inexperience and out-of-date regulations

20 November, 2013

In a submission (#282) to the Senate Standing Committee on Economics, Niall Coburn, a senior specialist adviser with ASIC’s enforcement directorate from 2009 to 2012, also stated the regulator is hampered by having limited skilled staff capable of handling complex cases. 

Coburn, who was also the former principal lawyer in ASIC’s enforcement directorate from 1993 to 2002, stated ASIC was able to tackle investigations of medium complexity but struggled with more complex matters due to limited skilled staff being “able to deliver on these major projects”. 

According to Coburn, experienced senior staffing levels at ASIC’s Enforcement Directorate have fallen to the point that there was only a handful of staff “who are capable of handling large complex investigations and who, most importantly, are able to deliver a prosecution result”. 

Coburn said many at senior management level were not engaged in operational activities, and few staff at the Commission or Senior Executive level had direct operational experience in prosecuting large investigations. 

As a result this has caused delays in prosecutions, particularly in cases stemming from corporate failures. Coburn’s comments echo those of the Community and Public Sector Union which stated that budget cuts had affected the regulator’s ability to attract, retain and train staff. 

In his submission Coburn claims delays are also caused by a duplication of resources between ASIC and the Commonwealth Director of Public Prosecutions (CDPP), and that ASIC should be given powers to investigate and lay charges in criminal matters. 

He also stated that regulatory procedures and national laws needed to change to consider the development of offshore companies, electronic transfers and the non-qualification requirements of directors. 

Coburn said that ASIC did not aggressively pursue defrauded funds off-shore but was not restricted in any way from tracing investor funds into other jurisdictions, nor was it unable to obtain civil court orders in offshore jurisdictions to prevent fund losses. 

Rather, he said ASIC needed more co-operation from the Australian Federal Police, the International Organisation of Securities Commissions and Interpol to find and return investor funds from offshore jurisdictions involving corporate or director fraud. 

Coburn also questioned ASIC’s use of enforceable undertakings, saying it appeared to use them as an 'expedient outcome’ instead of initiating legal prosecution due to the time, cost and difficulty in establishing that criminal offences have been committed.

Comment from Denise: As an experienced advocate with letters to and from ASIC since 1998, I can assure readers that Niall Coburn is explaining in his submission, what so many have been crying out for years.  Yet he was on the inside of this tragedy.  Coburn exposes the abject poverty of thought emanating from ASIC.  Yet it has taken 15 years of lobbying by aggrieved consumers of financial products and so called services for the Federal Government to truly start looking into what is wrong with ASIC.  It has plenty of legislative remedies but simply does not have the intellect to understand how to use those powers.  The Australian Sub Prime Banking Scandal which threatens our economy, was under ASIC's jurisdiction, on ASIC's watch and started about the same time as ASIC.

Some of the worst Spruikers of "creating wealth" aka creating debt and poverty, were simply given a slap over the wrist by ASIC, in the form of an ENFORCEABLE UNDERTAKING. That means sign here and we at asic will wipe the slate clean.....who cares if $60 million or $1.5 billion went missing in 2000 - happened.  When I warned that the figure could climb to $5 billion, nothing was taken seriously.

Now sadly, we are dealing with possible $100 billion and rising.  Its taken a Senate Inquiry into the Performance of ASIC, the first in Australia's history, to bring out the whistleblowers and expose the Corporate Cop's inability to handle serious complaints for nearly two decades.

Bankers, their corrupted lawyers, spruikers, developers, accountants and corporate directors have been running rings around ASIC since 1998 and no doubt the previous couple of decades before that.  Banker Bandits were in control of the our detriment and to that of future generations.  I expect we shall in some way or another all pay a price for this folly.  The most important thing is that all of the dark dirty secrets need to be laid bare.  As a close and long term observer, I can assure you corruption also eeked into the weakened system of regulatory easing of control, as it did in all other democratic countries.  How could we possibly be so blind as to think it was not happening here?

Bring on the:  Royal Commission into Banking and Finance and their subsidiaries and agents, ASIC and liquidators.   Financial products and services are riddled with traps for the unwary and uninformed.   There is no Consumer Protection in Australia words to main stream media in Brisbane and Tasmania in 2001.

Yet this opportunity for a new beginning means we Aussies now have a golden chance to undo some of the damage that regulatory neglect has delivered to all of us as a society.  This email address is being protected from spambots. You need JavaScript enabled to view it.

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