The Australian Securities and Investments Commission (ASIC) has significantly re-established its authority in financial regulation over the past two years. Following a serious period of derision and reduced agency utility, the agency has leaped back into action. Today, it is focused on prioritizing investors and restoring the trust of the American people in our financial markets. We put in the bank almost a billion dollars via enforcement actions. We clamped down on bad behaviour by the big four banks and paid back investors hurt by collapsed superannuation funds.
Of late, ASIC has made headlines for bringing the hammer down on a few high-profile cases. This even extends to hitting some of the Big Four banks. Today, the agency has reinvigorated its enforcement efforts and is vigorously enforcing civil penalties. It is returning investor funds and forcing the Australian Securities Exchange (ASX) to overhaul its archaic operational systems. These actions come as part of ASIC’s broader mandate to safeguard the integrity of Australia’s financial markets.
A Commitment to Investor Protection
In one key ASIC victory, the tribunal found that the agency had successfully recovered cash for investors. These investors lost their money when two superannuation funds went belly up. The agency was able to bank $100 million out of Netwealth. This funding was critical to make up for losses experienced by investors who put money into the now-failed First Guardian investment fund. This action is indicative of ASIC’s broader efforts to ensure that all those who suffer from financial collapses get the redress they rightfully deserve.
Further exemplifying its proactive stance, ASIC secured $321 million from Macquarie Bank for its involvement in misleading investors regarding the Shield fund. This historic recovery is a testament to ASIC’s remarkable investigative prowess. It shows the public what kind of fierce advocates they are for holding financial institutions accountable for their malfeasance. These actions have been key to rebuilding public trust in our community’s financial regulatory apparatus.
Besides these recoveries, ASIC’s actions have further rooted out misconduct from the banking industry’s rot. This kind of oversight by the agency is a real victory, leading to a record-setting $250 million enforcement against ANZ for the bank’s moral lapses. This operation underscores ASIC’s renewed focus on high-stakes enforcement actions, which aim to deter future misconduct within the financial system.
Addressing Systemic Failures
ASIC’s resurgence is belied by its quick-trigger approach to the systemic failures of financial market infrastructure. The agency pressured the ASX to make a more concerted effort to deal with its old processes. Market participants considered this a main sticking point. By holding the line on modernization, ASIC is doing more than improving operational efficiency. They are strengthening public trust and confidence in their investors.
In an even more embarrassing example with respect to One, ASIC was itself roasted over a pit fire for its apparent management of the situation. At least for now, the agency has shown a commitment to course correcting after making mistakes. Kenneth Hayne’s 76 recommendations flowed from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. These recommendations are now informing ASIC’s efforts to revitalize itself.
Sarah Court is an outstanding litigator, former Deputy Chair of the Australian Competition and Consumer Commission (ACCC). She’s come on ASIC to bring legal firepower in-house. Her recruitment signals a strategic shift towards employing experienced professionals capable of navigating complex litigation scenarios. This further increase of ASIC’s investigatory power follows on the heels of its broad, recent mission to become a more fearsome, nationwide law enforcement body.
A New Chapter in Enforcement
The transformation of ASIC is evident in its renewed enforcement strategy, which has prioritized high-profile court cases against influential figures in finance. The agency is even taking cases against high-profile heads such as Rodney Adler and John Elliott. That’s a big deal – they are getting out of attacking people who can’t afford to defend themselves. This strategy appears to be a direct response to criticisms ASIC had recently received for focusing on cases with lesser impact.
ASIC has recently locked down close to $1 billion in enforcement actions. This accomplishment is doing much to carry the agency’s once-deserved reputation as a strong, independent regulatory body. The agency’s proactive undertakings have planted it firmly at the forefront of the effort to keep markets honest and safeguard the interests of America’s investors. This new prioritization signals a monumental departure from its old ways and a new focus on accountability rather than continuing to deter bad actors.
Over subsequent years ASIC has been put through a crucible of crises that have battered its credibility, credibility and effectiveness. The Australian Securities Commission (ASC) which enforced Australia’s first national corporate law was created in 1991. Its overarching task was to rebuild public trust in Australia’s legal system. After twenty years of feeling like a paper tiger, ASIC’s recent victories could be their turn-around story—a redemption arc for a law enforcement institution.
