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BFCSA: Peter Kell questioned re BANK FUNDED SPRUIKERS 2004

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ASIC bumbles as spruikers rake in the dosh  June 5, 2004


By John Garnaut

A year ago, lawyer David Knott quietly told Treasurer Peter Costello he would step down as chairman of the Australian Securities and Investments Commission. Last month, Costello appointed accountant Jeff Lucy as Knott's permanent replacement.  The deputy chair, vacated by Lucy in December, is still open because Costello's preferred candidates don't want the job.

Peter Kell, ASIC's respected consumer protection head, quit earlier this year. As did Pauline Vamos, who had implemented the financial services reform legislation. As did Peter Wood, the successful head of enforcement. They followed Sean Hughes, head of regulatory operations, who made for the exit late last year.  Others within ASIC's leadership are considering their futures. As some will tell you, ASIC no longer feels like a rewarding place to work.

The Hansard records of this week's Senate Estimates provide an insight into what is going wrong.  The tone for this week's hearings was set in February, when MP John Watson, a Liberal backbencher, tried to ask (the then acting) chair Jeffrey Lucy whether he had given any speeches articulating his vision for ASIC.  The reply: "Not to my recollection."   It was not an encouraging sign for those hoping for direction.

This week (2004), Stephen Conroy, the Opposition's financial services spokesman, turned to what ASIC had done about property spruikers?  Privately, some senior ASIC officials say that controlling rogues on the property seminar circuit is Australia's most pressing consumer issue.

It is well known that neither ASIC nor any other agency has adequate powers to deal with the problem. But many think ASIC could have done a whole lot more than it has. 

Conroy held up a draft ASIC report on property spruiking, dated May 2003, which Ian Johnston, who heads ASIC's FSR unit, had previously told the committee had never been produced. It argued for new property regulation and also canvassed areas in which ASIC could act.  (NB: the Mary Good report and the Deborah Latimer Report)

From there, the hearing fell into entanglement.   Johnston explained that the report had been prepared but not released publicly ASIC commissioner Berna Collier said she could not recall seeing the report, but also noted that the commission had rejected a property spruiking report because it was flawed and needed "rounding".   Lucy said he could not recall seeing the report nor briefing any official on the subject, but took the questions on notice. After lunching with Collier, he told the committee that the two of them had in fact briefed Ian Campbell, then Parliamentary Secretary to the Treasurer.

To be fair to Johnston, Collier and Lucy, Conroy's questions were at times ambiguous and they were not shown copies of the document he held.

(BFCSA has copies) Senator wanted to see what their copy contained before I released my copy………………arrived in brown paper bag.

Lucy defended ASIC's answers, saying: "What we were keen to do is make sure we could answer the questions accurately."  But it is unfortunate that ASIC's insights into the property industry were never made public

Conroy alleged the report had been deliberately buried, presumably to avoid embarrassing the Government over its regulatory gap.  "There is nothing sinister," Collier told the Herald. "There is no cover-up." 

She was probably right. But the alternative is also damning.

As one former ASIC executive observed: "Never underestimate the importance of institutional incompetence in explaining conspiracies."  The report should have blown the property spruiking industry wide open.  Instead, it sat virtually untouched from May until it went to the three commissioners in September. 

A legal review of the report was commissioned through ASIC's legal and technical division, but none of the ASIC executives at Senate estimates could recall that either.

The enforcement people, under Peter Wood, prepared a third document on property spruiking but had not liaised with other divisions.   The original report resurfaced in time for a commission meeting in September.

Collier thought it needed more work and scribbled blue corrections all over it. It needed further input because Kell, head of consumer protection, hadn't seen it and neither had Wood, head of enforcement.

The commission decided to roll the work into the state-federal working party on consumer affairs. This committee has missed its March 2003 reporting deadline

More than a year after ASIC discovered that property spruiking was a $60 million-plus industry and that no one made money but the spruikers, the nation's number one corporate and investment regulator remains largely silent.

On Thursday, the ACCC's Graeme Samuel stood up in Senate Estimates and claimed credit for driving the industry underground. Nobody on the committee could dispute him

NB:  All questions asked by Mr Conroy to ask ASIC in Parliament - were supplied by D Brailey of RECA.

Berna Collier (after only four years as a solicitor) was appointed as a Judge soon after.

Ian Johnston (see Wheeldon revelations 2014) was sent to overseas posting $1 million tax free for 3 years.

14 of the luminaries disappeared to similar appointments – IOSCO, etc, including Tanzer

Kell went to CHOICE as CEO for a short moment and then returned later to ASIC

Pauline Vamos heads Superannuation

Sean Hughes went to NZ posting (?) 

See also Senator Sherry's questions thrown at ASIC Peter Kell, in Parliament, in May/June 2005.

The Mary Good report and its second version Debrorah Latimer (we have copies) went to the Ministerial Council on Consumer Affairs.  They released report to PM later in 2004, headed by Qld Minister.  Prime Minister decided the report must never be released to the public.

RECA wrote detailed submission to MCCA – never released.  The Senators then called for Property Advice Inquiry 2005 (PIA Inquiry)  Senators asked for permission for me to release my MCCA sub to PIA Inquiry.  I did so, plus supplying attached evidence against 4 years work on Spruikers including Henry Kaye.

Senator Cormann in 2014 asked Peter Kell, now Deputy Chair of ASIC: “what about the spruikers?”  Kell answered [WTE] “we will be doing something….”

Time for long suffering public to call for demise of ASIC as consumer protector and demand a FEDERAL BUREAU of Consumer Protection be set up immediately and incorporate SERIOUS FRAUD OFFICE.                 

No Bankers or ASIC luminaries past or present need apply.   This email address is being protected from spambots. You need JavaScript enabled to view it.


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  • doyla66
    doyla66 Sunday, 06 April 2014

    No more fence sitting - sock it to them!

    At some stage the Senators are going to throw the book at Peter Kell, spruiker and defender of the divine right of ASIC.
    Just imagine Senator Bishop, Senator Cormann and Senator Williams all getting stuck into him at the same time.
    Looking forward to seeing someone in the Senate really challenge ASIC on their guff and their stuff.
    Dear Senators, please stop pandering to ASIC. They're in need of more than a changing of the guard.
    Dirty linen abounds, everyone knows, we're behaving like the old style British - we don't talk about it.
    I wouldn't blame any one of the Senators striding over to an ASIC commisioner and shaking them by the collar until they told the raw truth. Nor, it seems, would the majority of Australians and the rest of the world.
    Forget the rules, dump the politeness, drop the PC stuff - get these guys sorted properly.
    We're all wondering why the delay? - and sorry to say after so many years of being ruined by these theoreticians and bureaucratic do-nothings, we're completely running out of patience.
    You have my personal permission to blast them in public - don't give up on them - someone has to be able to get the truth out of ASIC and all the other cover-up experts.

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