‘Business as usual’: ASIC deputy holds ground under fire

The Senate economics legislation committee scrutinised senior representatives from the Australian Securities and Investments Commission (ASIC) during a special hearing convened on Wednesday (1 March).

ASIC chair Joe Longo and deputy chairs Karen Chester and Sarah Court faced hours of questioning regarding previous evidence to the committee on 16 February, which downplayed concerns flagged in a Treasury investigation into Ms Chester’s conduct.

ASIC’s leadership team had previously told the committee the Treasury report produced “no adverse findings” against Ms Chester.

However, a Treasury communication sent to Mr Longo in February 2022 had noted many of the instances of alleged misconduct could be “wholly or partially substantiated”.

In light of this evidence, Mr Longo distanced himself from previous committee testimony, instead conceding the Treasury investigation produced “mixed” findings.

Despite the shift in rhetoric, Mr Longo denied having misled the parliamentary committee in his previous evidence, which he said was based on his “recollection at the time”.

“I reject any suggestion that the evidence I gave at the 16 February hearing was other than in good faith,” he said.

Mr Longo went on to explain why he chose not to take action against Ms Chester after being made known of Treasury’s findings.

He said following a “legally privileged” reading of the Treasury report, which did not remain in ASIC possession, he deemed no further action was necessary.  

“It was apparent to me that the confidential investigation concerned a historical point in time that occurred before my time at ASIC and during a period of upheaval at the most senior level of the organisation,” he said.

“What I read in the confidential and legally privileged report did not reflect what I had seen in the organisation in the seven months since my appointment.”

Mr Longo said the likelihood of the alleged conduct reoccurring, in his view, was “very low”.

“In the seven months since I had become chair, I had not seen any conduct by deputy chair Chester, that concerned me,” he added.

Moreover, the ASIC chair said there was a “lack of utility” in reinvestigating the instances in question.

“Based on those factors, I decided that I would not proceed with the formal investigation under the ASIC Code of Conduct at that time,” he told the committee.

At the conclusion of the Senate committee hearing, Ms Chester was asked if the “unorthodox” evidence presented to the parliament had “impaired in any way” her capacity to operate as the deputy chair at ASIC.

In response, Ms Chester rejected any concerns over her deputy leadership.

“No, Senator, not at all,” she said. “It is busy business as usual.”