ASIC defends itself against Storm allegations

The corporate regulator has been forced to defend its enforcement record in the wake of criticism that it improperly discontinued investigations of bankers implicated in the collapse of Storm Financial.

In a letter to the editor of the News Corp-owned Courier Mail, ASIC commissioner Greg Tanzer said recent articles in the paper had “missed the mark”.

An editorial had stated that ASIC’s decision to drop an investigation into Townsville Bank of Queensland (BoQ) franchisees Declan Carnes and Matthew Buchanan was an “abrogation of the regulator’s responsibility” and showed “lack of interest”.

In response, Mr Tanzer defended the regulator, saying that ASIC had achieved its aim, which was to recover compensation for Storm investors.

“ASIC’s action has resulted in around $360 million being paid in compensation to investors caught up in the collapse, including the Bank of Queensland agreeing to pay out nearly $17 million to its customers who suffered losses,” Mr Tanzer in a statement.

“A proper consideration of ASIC’s enforcement record will show that there have been many actions taken against major banks, including UBS, BNP, Macquarie Bank, ANZ and the Commonwealth Bank to name but a few.”

However, Mr Tanzer did not comment directly on the case of Mr Carnes and Mr Buchanan in his letter to the editor, focusing instead on the regulator's broader enforcement record.

“In the last five years, we have removed 69 advisers from the industry temporarily or permanently, secured 19 criminal outcomes, entered into 25 enforceable undertakings and had 23 licenses cancelled,” he wrote.

As reported by the Courier-Mail last month, Justice Jean Dalton took aim at Mr Carnes, co-owner of the BoQ North Ward franchise in Townsville, during a trial in the Supreme Court in Brisbane relating to his decision to use a disabled man’s wheelchair-adapted home as security for a business loan.

During final submissions, Justice Dalton said she “thought he was a cowboy”, while Mr Carnes himself admitted that there had been “inappropriate” and “inexplicable” behaviour by staff in his branch.

As a result of the case, BoQ has said that it will further investigate Mr Carnes.

When contacted by ifa, an ASIC spokesperson said, "In relation to the Bank of Queensland matters which have been reported on in the Courier-Mail, our standard policy is not to comment on operational matters, this includes whether ASIC is looking into a particular matter or persons, or not."

 

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