Following inquires conducted into the Sterling Group late last year – which eventually collapsed in 2019, leaving more than 100 customers facing possible eviction and heavy financial losses – the report stated that the corporate regulator did not act quickly enough and “should have been more proactive”.
During the inquiries in November, ASIC chair Joseph Longo conceded that the regulator had received complaints about matters related to Sterling in late 2016, however it did not become officially involved until a referral by the Western Australia Department of Mines, Industry Regulation and Safety in March 2017.
“ASIC’s inaction and excuses are disconnected from the reality that it knew the target market of the Sterling scheme was vulnerable, elderly consumers,” senator Malcolm Roberts said in the report.
“This knowledge should have been sufficient for ASIC to respond aggressively to the very first reports of misconduct. By not doing so, more than 100 rent-for-life tenants lost $18.554 million upon Sterling’s collapse in 2019, and now face eviction and homelessness.
“A concern raised about compensating these victims has been that it would amount to the government compensating a general investment loss. The unique circumstances and especially the failure of ASIC to act in a timely manner distinguish these victims from just being victims of a lost investment. ASIC had all the information and power to respond to the complaints. Had ASIC done so quickly, many millions would have certainly been saved. ASIC did not act quickly.”
Mr Roberts said that when considering all factors, including ASIC’s “regulatory negligence”, the government should “immediately compensate” the 130 victims for the full amount lost, plus interest and expenses.
Shortly after the inquiry in November, Mr Longo conceded that ASIC could have acted differently, but refused to apologise for the matter saying it would not be “emotionally inappropriate”.
They’d rather ban Advisers who try to do the best by their clients, though whose strategies and calculations ASIC’s analysts and delegates don’t understand, so put into the “too hard” basket, and those advisers who follow the directions of their dealer groups. The buck always stops with the adviser though and policing the groups and execs who actually cause damage to clients and the industry is too hard apparently.
sure the CSLR will include levies imposed on asset managers like Sterling, WTF ? I believe no one in financial planning recommended this investment. SLEEPY ASIC ….
ASIC has been “ emotionally inappropriate “ for the last 20 years.
They are not only emotionally inappropriate…they are simply, inappropriate.
ASIC have been discriminatory and targeted toward financial advisers and have a cultural and ideological hatred of advisers which has
resulted in unfair persecution based on minutiae and little if no impact whatsoever on the the client or consumer.
Josh Frydenberg is entirely negligent in his inability or lack of attention to rectify ASIC’s culture.
ASIC are drunk with power and resources and are abusing it for their own end.
ASIC is far too busy persecuting licensed advisers who have caused no consumer harm whatsoever. They don’t have the time or resources to protect consumers from the real sources of harm.
The solution to both of these problems is to remove licensed financial advice from ASIC’s control altogether. Licensed advisers should only be regulated by the FSCP (which Hume incorrectly calls a “single disciplinary body”).
So this is potentially going to cost us tax payers $18+mill in Govt compensation due to ASIC’s inaction….cant wait to see what the consequences are for this dictatorial organisation???
ASIC make the Australian Cricket Board look like a thoroughly professional outfit, fully across their brief and executing flawlessly.
Bit weird, the Australian Cricket Board is doing great. Just had two successful Ashes series (admittedly the rain knock out a few days/games for the women, shorter Tests for the men due to an average opposition). consider the global pandemic, they have done pretty well I reckon. ASIC probably not so great on Sterling.
Lawyers laughing all the way to the bank.
“As long as it is not too hard and ASIC gets good publicity” should be the ASIC moto – always late to the party.
Too busy making sure that Advisers had the correct spelling in our 90 page SOA’s.
curious – I wonder if they banned a few of the ASIC team for failure to act properly? seems to be all the rage