BFCSA: Pathetic ASIC names journalists who speak out for consumers: Michael West hits back at useless Corp Cop

In the middle of a Tsunami of 30,000 complaints against banks, lenders, financial products and services, ASIC have nothing better to do with their $450 million budget than design a protect consumers you may ask?  Add on to woof woof FIDO page that even Fido does not read?  No No No, something much more important.........ASIC want to name and shame.....waaaaaaaaaaaaaaaaaaaaait for and shame award winning journalists who are game enough to criticise our useless Corporate Doormat Cop for snoozing on the job.

The sooner the nation rids itself of the Monolith of Uselessness known as Australian Securities and Investment Commission ("ASIC"), the better consumers will be protected.   If we have to go back to BUYER BEWARE then let it start with Buyer Beware of the so called regulator was never there to protect YOU.  ASIC protects the charletans and banksters....evidenced by the escalating numbers of consumer complaints from our older citizens.  In fact the regulators are regulated by the Bankers.  Our files tell the story in SUB PRIME language.

Apart from the fact ASIC are copying our Hall of Shame idea, they do not possess original ideas.   Go Michael and Adele!


March 1, 2014
Michael West

Business columnist

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We know this because we warned them ourselves.

"Clean bill of health" was the response. Six months later, Storm and its 13,000 clients and $4 billion in funds collapsed. On the barometer of sheer human misery, this was the worst collapse the country had seen.

The regulator had been fielding complaints about Storm's founder Emmanuel Cassimatis since Cassimatis had been flogging financial product for the Commonwealth Bank in the 1990s.

It had also been warned in advance about Allco and Babcock, ABC Learning, Rubicon, City Pacific and Australian Capital Reserve. No doubt a host of others. These are merely the ones we were involved with, or knew about.

Entire industries blown to smithereens: plantation schemes such as Great Southern, debenture funds such as Westpoint and mortgage funds such as City Pacific, with almost no regulatory action and nary a prosecution. Some $30 billion in savings.

The message, and one which is by no means lost on sharp operators, is that you can swindle people with impunity and you will not be brought to justice; as long as you are big enough.

In this job, you hear the tales of life savings lost, savvy con-jobs - often actionable but rarely apprehended - and the dreadful stories of suicide and marriage breakdown. For two decades we have been listening to this stuff while trying to get ASIC to act.

In the past, we had wondered why they were loath to discuss schemes which might soon obliterate people's life savings. More than once we pleaded, "Look, we're on the same side here. We should be trying to nail these hucksters together. Can we talk?" No.

The regulator did act the other day. It set up a section on its website where it names and shames journalists: "ASIC responds to wayward reporting.''

Yours truly, along with colleague Adele Ferguson, are proudly neck-and-neck on this wayward reporters' league table. It was even the subject of envy from another colleague, a winner of the prized and beloved "Australia's Worst Journalist" award from disgraced former doctor Geoffrey Edelsten.

Well might journalists enjoy a hearty chuckle for being blacklisted by ASIC, but this sideshow belies a deadly serious matter.

It is fair to say that many good people work at the corporate regulator. It is also fair to say, caveat emptor, there should be a burden of vigilance on investors themselves. ASIC cannot be expected to prevent every collapse or bring every miscreant to justice.

It confronts complex matters of policy and execution.

Yet the cultural problems run deep. The big one is guts. The leadership has always been weak. They regulate by press release, they keep their heads low. They are reactive, not proactive.

And so, in the wake of the scandal inside the Commonwealth Bank's financial arm, they now face an inquiry, the Senate Inquiry into the Performance of ASIC. Last week chairman Greg Medcraft identified what he saw as the problem: "communications".

In testimony before the Senate, Medcraft blamed bad PR for ASIC's woes. He also said the penalties regime could be toughened to enforce good corporate behaviour.

But ASIC already has the powers. It is not the laws that need to change, it is their enforcement.

G4S for instance, the British multinational at the centre of the Manus Island tragedy, regularly filed its financial accounts late. It was never penalised. Same deal for a slather of other multinationals, not to mention billionaires Clive Palmer and Gina Rinehart, who either lodged late or failed to lodge accounts at all. Not a fine has been issued.

It would be a terrific revenue stream, just one of many, were the regulator to enforce the laws. Schedule 3 of the Corporations Act details 346 penalties, ranging from small fines to imprisonment. Few are ever invoked, and for the big end of town, probably none.

ASIC is already a cash cow for Canberra. It tips in a dividend of $300 million plus per year for the national coffers from company registration and database charges.

Any meaningful reform therefore is likely to be hampered by a Sir Humphrey in the nation's capital. Imagine it. "Yes Minister, the commission fulfils its role magnificently. Perhaps, after the Senate inquiry, a white paper is in order. Quell the unrest. This should defer any reform or other adverse activity into the following year, or at least until such time as it is forgotten.''

Fee grab

And so the calls went on this week. There were two phone calls which spring to mind. The first one pointed out that administrators Bentleys had charged almost $20 million in fees and disbursements from the failed Summit Mortgage Fund. This was half the $40 million in recoveries from Summit, guzzled in lawyers' and liquidators' charges.

This time last year we reported how Bentleys had ripped $17 million out of the corpse of Octaviar (nee MFS). The regulatory failure in insolvency is epic.

The second call came from a consumer whacked with a $20 late credit card fee for paying two days late.

ANZ recently lost in a class action for charging excessive late payment fees. Presumably, the bank has given itself legal advice that it can keep charging until the outcome of its appeal is known. She called ASIC and was told to complain to FOS (the Financial Ombudsman Service, funded by the banks).

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