Appearing before the Senate economics references committee on Friday, Australian Securities and Investments Commission (ASIC) chair Joe Longo said there is “absolutely no evidence” to support the assertion made by Liberal Senator Andrew Bragg accusing the regulator of being “addicted” to secrecy and obfuscation.
Last week, the corporate regulator 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, 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 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.
Speaking to the Senate committee on Friday, Mr Longo unequivocally rejected the report’s findings.
“I wish to make clear that I reject the interim report’s findings and the statements made in Parliament about ASIC’s insider trading and general enforcement record,” Mr Longo said.
Moreover, he specifically underscored the groundless nature of the assertion that ASIC attempted to undermine and influence the inquiry process right from the start.
“ASIC is accountable to Parliament. This inquiry is an important part of ASIC’s oversight,” he said.
Arguing that ASIC has answered 104 out of 109 questions on notice relating to individual matters to assist the committee, Mr Longo underlined that the corporate regulator is a law enforcement agency and that such an agency operates within specific limitations and constraints.
“And as a law enforcement agency, like the AFP, ATO and other agencies, there are limits on what documents we can share. We need to ensure that our current and future work is not adversely impacted through public disclosure of our investigative files, transcripts, and our legal advice,” he explained.
“Information about closed investigations can still prejudice ASIC’s related and future investigations. It can disclose ASIC’s methods and legal advice and also adversely impact people who have assisted ASIC and, of course, unfairly prejudice people who have been the subject of our investigations,” Mr Longo continued.
He, however, stated that ASIC is now giving further consideration to the orders made by the Senate and the committee’s interim report.
Mr Longo also strongly refuted the committee’s claim that individuals engaging in insider trading in Australia would evade consequences, asserting that it couldn’t be further from the truth.
“It is incorrect. ASIC has a strong and consistent record of insider trading convictions.”
Moreover, Mr Longo also rejected “entirely” assertions that ASIC is a weak corporate regulator. On the contrary, he said, “we have been, and continue to be, an active and effective litigator”.
“I have said before, I’m committed to making ASIC an ambitious and confident regulator. Enforcement is at the heart of what we do.
“Together with the regulatory and supervisory work we do, it supports Australia’s strong financial system and markets.”
Bragg fires shots at ASIC
In a statement accompanying last week’s release of the committee’s report, 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”.
