Mr Bragg has made repeated criticisms of the Australian Securities and Investments Commission (ASIC) over its refusal to provide documents to the Senate economics references committee’s inquiry into the regulator’s investigation and enforcement activities, stating that the Senate “cannot properly investigate ASIC whilst it continues to obfuscate”.
An interim report tabled in the Senate in June by the committee, which has been investigating ASIC enforcement since last year, rejected 11 of 13 claims for public interest immunity made by ASIC chair Joe Longo.
The report highlighted 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 had assessed as a deliberate attempt to undermine its inquiry.
The committee made an official recommendation in the Senate that ASIC provide the documents, with a deadline set for 18 July. ASIC did not supply the committee with the information, leading to Mr Bragg, who serves as chair of the committee, releasing a statement taking aim at the regulator.
Ahead of Ms Gallagher fronting up to the Senate, Mr Bragg again urged the Labor government to act.
“With the support of the executive government, ASIC has treated the Senate with contempt since we established our ASIC Inquiry last October. We cannot do our work whilst this secrecy continues,” Mr Bragg said in a statement.
“It is disappointing that the executive government believes that ASIC should be beyond reproach. The executive government should support our inquiry to build a strong corporate regulator and end white collar crime in Australia.
“The minister representing the Treasurer, Katy Gallagher, by Order of the Senate, is now required to explain to the Senate why ASIC has failed to comply with our orders.”
Responding to the claims in the Senate on Wednesday afternoon, Ms Gallagher said that ASIC was within its rights to withhold the documents on “several grounds”, including the possibility of prejudicing ongoing investigation or enforcement matters, concern over publicly disclosing ASIC law enforcement methodologies, possible prejudice to third parties’ privacy and reputation, and possible disclosure of privileged legal advice.
“To be clear, neither I nor the Treasurer nor the Assistant Treasurer have seen the relevant documents and there is good reason for that. As an independent regulator, ASIC only shares confidential investigative information with the government in the very rare event, that it is necessary and appropriate to do so,” Ms Gallagher told the Senate.
“As the Senate will be aware, the government is precluded from giving ASIC directions under Section 12 of the ASIC Act about particular cases. So, the circumstances in which it will be necessary and appropriate to share with the government documents that relate to particular enforcement matters will be extremely rare.”
The minister added that ASIC told the committee at a public hearing on 23 June that it is “difficult for ASIC to publicly explain the specific harm that would be caused by publishing a document without revealing exactly the information that creates the harm”.
“I’m advised ASIC has offered the committee an in camera briefing to allow ASIC to discuss their PII claim further and makes further submissions using non-confidential information that help explain the context of the enforcement matters of interest to the committee,” Ms Gallagher said.
“I understand the chair, Senator Bragg, has rejected this proposal without explanation. I reiterate, we cannot provide these documents as we do not have them nor have we seen them. I suggest to Senator Bragg and the Senate that the in camera briefing offered is the most appropriate next step to allow the committee to assess ASIC’s concerns.
“If Senator Bragg continues to insist upon the release of these documents in spite of this offer, then that will show that he is only interested in political grandstanding and media headlines.”
In response, Mr Bragg said the Senate committee was seeking to bring transparency to ASIC’s investigations.
“I think it is very regrettable that the government that was elected on the basis of being transparent and having a connection to integrity, wants all this to be done in secret,” he told the Senate.
“ASIC, of course, want to do all its meetings with the committee in secret, even though these are closed files because they don’t want to have any scrutiny on why they haven’t put people in jail. Why they haven’t been able to secure civil penalties, why all these people break these laws and get away with it.
“And I think that is really the sickness here, that we are trying to do this in sunlight and the government through Minister Gallagher and the Treasurer and Minister Jones are seeking to support ASIC’s objective to keep it all in the dark to stop the inquiry and for it to all go away.”
Senator Bragg has nailed it !!!!
Asic need to I force there rules when you have liquidation firms who can committ white collar crimes and get away with it !!!
Enough is enough
I think Senator Andrew Bragg is on the right track to ask ASIC, because its investigations and enforcements costs are used to calculate financial advisers’ ASIC Industry Funding Levy for the recovery of these costs. On 3 August 2023 I received an email from ASIC for my business metrics to prepare to pay 2022-23 Industry Funding Levy. 16,000 financial advisers on ASIC’s Financial Adviser Register do not know what we are paying for in this levy? There is no accountability by the Minister of Finance, Senator Gallagher! I suggest that 16,000 financial advisers under Freedom of Information ACT should request the same information as Senator Bragg. My guess is that the majority of ASIC’s enforcement costs may not be related to those FAR registered advisers, but we are the ‘guinea pigs’ paying for it. It is seriously suspicious that the Minister of Financial Services wants to hide this ASIC information. Hon Stuart Roberts is on the public record saying that Treasury gains 1.6 times ASIC’s enforcements costs by (1) ASIC collects from financial advisers and (2) when wrong doers pay penalties, it is not credited back to financial advisers’ levy but a windfall gain to Treasury. In effect, it is Legislated abuse of financial advisers that reduced its numbers from 28,000 in 2017 to 16,000 in 2023, that obviously increased the competitive advantage of big banks and industry super funds. Federal Labor is not interested in supporting financial advisers as agents for their clients, as required under the Australian Corporations ACT and appears ignorant of competitive market forces in the Australian financial market (see: Professor Michael Porter 1979 – Five Forces Model, Harvard Business Review). The Financial Advice Association Australia (FAAA) should arrange for every member to send an FOI request for the same information requested by the good Senator Andrew Bragg, with their FOI information response copy also sent to Senator Andrew Bragg. If each AR registered financial advisers do not do this now, you should budget to pay around $3,000 each adviser in ASIC Industry Funding Levy in March 2024.
If holding rogue regulators to account is political grandstanding, then Australia needs a lot more political grandstanding.
ASIC’s bias and incompetence has caused great harm to honest professional advisers, and ultimately even greater harm to consumers who have been thrown to the wolves of unlicensed advice and dodgy products. Governments who allow rogue regulators to wreak havoc are betraying the citizenry. Hume was guilty of it, and now so are Jones and Gallagher.
Katy Gallagher – isn’t she the one who potentially mislead parliament?
Now this – are we meant to believe her?
“To be clear, neither I nor the Treasurer nor the Assistant Treasurer have seen the relevant documents and there is good reason for that……”
Just it seems no one believes ASIC or the reasons being given – nor potentially does anyone believe Katy Gallagher?
Keep digging Bragg – dig.
It is a pity that the ALP and Katy Gallagher are more interested in protecting ASIC then holding them to account.
A government’s job is to oversee the bureaucrats, not pander to them.
100%
Labour would know all about grand standing.
The QAR report has been twisted to enable them to open the door for the ISF to control the advice sector.
ASIC and APRA get a pass by Labour in exchange for a light or non existent touch by them in respect of industry super and the unions.
Jane Hume should have never set up the QAR in the first place. She’s given her political opponents the perfect weapon to serve their interests. She has no political instincts whatsoever.
very true, she (along with Ms O’Dwyer) were a complete disaster for Australian Financial Advisers
Perhaps Hume knew exactly what she was/is doing – just a Labor person working from within the Liberal Party? Seems no one in the Liberal Party had any issue with her policies – just Liberal voters?