ASIC is ‘addicted’ to secrecy, says committee chair

The corporate regulator has faced accusations from major political parties of impeding parliamentary investigations into its oversight of the country’s businesses.

An interim report tabled in the Senate on Tuesday by the Senate’s economics references committee, which has been investigating ASIC enforcement since last year, has rejected 11 of 13 claims for public interest immunity made by Joe Longo.

The report highlights that while posing over 100 inquiries regarding investigations, including the scrutiny of forensic data software company Nuix and laboratory firm ALS, the committee encountered 13 claims of public interest immunity, which it has assessed as a deliberate attempt to undermine its inquiry.

ASIC’s claims also pertain to the communications exchanged between itself and MPs, and their staff, during the establishment of the inquiry, leading the report to raise concerns about the possibility that ASIC could have attempted to meddle in the Senate’s proceedings by exerting influence over the inquiry’s terms of reference.

“The committee finds it troubling that instead of reflecting on and responding to this broad community concern, ASIC has instead chosen to hinder the committee’s work by refusing to answer questions on notice. As shown in this report, the committee has made many attempts over several months to obtain the information sought, some chains of correspondence starting in December of last year,” the report reads.

“The committee has formed a view that ASIC’s refusal to provide this information is obstructing the committee’s ability to conduct this inquiry. As such, the committee has taken the significant action of making recommendations that the Senate order the provision of the information sought.”

Namely, what the committee has now sought is for the Senate to force the regulator to release the information it had previously asked for.

In a statement accompanying the report’s release, the chair of the committee, Andrew Bragg, accused the corporate regulator of “trying to frustrate the Senate’s role to investigate porous law enforcement in Australia”.

“ASIC has one main job, which is to enforce the law and achieve prosecutions. ASIC has failed to do its job,” Mr Bragg said.

He clarified that the report presented to the Senate by the committee is “certainly not” a list of recommendations to fundamentally fix ASIC. “This particular report is designed to end the secrecy and obfuscation to which ASIC is addicted,” he said.

Mr Bragg confirmed that in the coming months, the committee will commission public hearings where there will be a “public airing of the substantive matter: failed law enforcement in Australia”.

ifa contacted ASIC on Wednesday, but a spokesperson declined to comment for now.

ASIC is, however, due to appear before the Senate economics references committee this Friday.

Reports ignored

Last year, a scathing report by economist John Adams of Adams Economics revealed reports of alleged misconduct submitted to the corporate regulator have approximately a 1 per cent chance or less of being officially investigated.

The report, based on publicly available data issued by the regulator itself, suggested ASIC’s performance has been on a slippery slope for several years despite the regulator being the subject of multiple inquiries and reviews as well as the banking royal commission.

“There remains ongoing frustration across the community among investors, consumers, and industry practitioners who are required to deal with ASIC,” Mr Adams said.

According to Mr Adams’ report — which considered a 10-year period spanning FY 2011–12 to FY 2020–21 — out of a total 134,542 reports of alleged misconduct made to ASIC, only 1,709 were officially investigated — equalling 1.27 per cent.

Of most concern, Mr Adams said, is that ASIC is getting worse when it comes to investigating alleged misconduct, with no improvement reported since the release of the royal commission’s final report which drew attention to the regulator’s insufficiencies relating to enforcement action.