In a recent hearing of the parliamentary joint committee on corporations and financial services, committee chair and Liberal senator James Paterson raised a series of questions around how soon management within ASIC knew of potential breaches of Mr Crennan’s remuneration package.
A letter from auditor general Grant Hehir in October indicated the regulator was first requested in August 2019 to seek the tribunal’s review of Mr Crennan’s $750 per week accommodation payments, which had been funded by ASIC from 2018 onwards.
Responses to questions on notice from ASIC indicate that a further “internal briefing note” dated 7 May 2020 on “the issues associated with Mr Crennan’s rental assistance” were provided to “the accountable authority” on 11 May 2020.
“What the advice in May sought to raise is what the options were; what an application to the Remuneration Tribunal might look like and the merits of that, but also what the other options were,” ASIC chief legal officer Chris Savundra explained to Mr Paterson at the time of the hearing.
“But also, a critical aspect of any application to the Remuneration Tribunal is that it would require the support of the minister.”
Further advice from the Australian Government Solicitor was also provided on 9 September, ASIC’s response stated.
A month later, on 15 October, the regulator stated it made the decision not to go to the Remuneration Tribunal around Mr Crennan’s expenses “following ASIC accepting Mr Crennan’s offer to voluntarily repay the rental assistance provided by ASIC”.
Following revelations at a hearing of the House economics committee later that month, an independent investigation into Mr Crennan and ASIC chair James Shipton’s expenses was launched, after it was revealed Mr Shipton had also charged almost $120,000 in accounting expenses to the regulator.
The next week, Mr Crennan announced he had brought forward his resignation from the position of ASIC deputy chair, which had been previously slated for July 2021.
So it’s okay if an Adviser breaches rules and benefits financially from those, as long as when caught they offer to pay back the money they received? I think not. As usual, there are double standards when it comes to the toxic culture that is ASIC.
You forgot the first few step. Once caught breaching the rules and benefiting financially,
1) ignore the regulator
When it looks like the regulator is going to keep wanting answers, implement next steps.
2) Use internal legal advise. Nice to know that the staff at ASIC are all willing to help ASIC Commissioners find a legal loophole – must be a real TEAM CULTURE at ASIC. This is all free obviously.
If legal loopholes looking a little thin, get INDEPENDENT legal advise from a mate.
3) Get Independent legal (obviously you don’t pay for the legal advise yourself, get ASIC to pay for it).
If you are still a little concerned that you might be on thin ice, implement get out of Jail Free Card.
4) Ask for retrospective ruling to make what was illegal now legal – because as someone working for ASIC you deserve this.
Worryingly, it appears many ASIC staff helped in these payments and legal advise, from making the payments, calculating the tax liability, legal advise, getting independent legal advise etc etc. Is any of this ETHICAL? Has anyone at ASIC passed FASEA?
Obviously, this is all hypothetical and I cant prove a thing but my mates at the pub, well, what would they say? Disinterested person anyone?
As a “disinterested person” I think it is reasonable to think that not only Shipton and Crennan ought to have known that this was not the right thing to do, but the rest of the ASIC commissioners should have known that this sort of thing was going on. Not knowing is no excuse. And it is these people including politicians who are holier than thou and make rules for us. When they are caught out the excuse is “they didn’t know” or it was not against the rules and they simply pay the money back and get away with it. If advisers make an honest mistake, they have to report the breach and are slammed. There is no room for error. We have to be perfect else we get a $50,000, $100,000 fine.
Corrupt
The current poppycock going on at the very top of ASIC smacks of clear evidence that the inmates are running the asylum. Don’t tell me that no one had any knowledge of these huge payments…how can that be possible? ASIC is always banging on to us about the provision of transparent, unambiguous advice to our clients, yet they can’t get their act together on something that appears to be such a simple piece of internal communication…perhaps it was “turning a blind eye”. It really does beggar belief. And these clowns get to slink away silently into the night, bags stuffed full of money with no sanctions whatsoever…what a hypocritical joke it is upon the financial services industry & the Australian public.
And let’s not forget our friends over at the soon to be put out of it’s misery FASEA, and the CEO (Sergeant Shultz “I see nothing, I hear nothing, I do nothing”) ridiculously getting non practitioners (ie academics) to set silly, ambiguous & incomprehensible questions in the exams (come on Stephen, you need to make an admission about that) and slipping over in his own vomit trying to make sense of the Standards, particularly number 3.
As Homer Simpson would say: “D’oh!”, with the appropriate forehead slap.
Do you think those comedians in government have learnt anything? Highly doubtful!
And these jokers reckon we are the bad guys requiring draconian style governance! And us advisers are stuck paying for these clowns…it’s a disgrace!
It’s high time we had a Royal Commission into all facets of ASIC, and throw in AFCA for good measure.
In fact, the better strategy would be to burn these ridiculous edifices down and start again, this time make sure there are good quality practitioners to assist during the rebuilding phase…thereby providing half a chance of getting it right.
Hey FPA, SMSFA & AFA, are you there? Are you reading this? Can you help us before we all become so terribly frustrated we leave the industry en masse? Think about from a self-preservation point of view…no or limited advisers, means no or limited fee income.
Hey annoyed & frustrated CFP, I agree with your comments. On the subject of AFCA, I have been following the public hearings over the last few months which are part of the inquiry by the NSW ILGA (that stands for the Independent Liquor & Gaming Authority, not the International Lesbian & Gay Association) into Crown Casino Resorts. It has been very unedifying, to say the least. Stunning concessions from Crown Casinos to allegations that criminals did probably launder money through their casinos, “junket” tour operators with organised crime links and drug dealings. Worst still, turning a “blind eye” to these activities for years. Add to the list the lack of co-operation with the Commission of Inquiry, including withholding vital information, much to the ire of commissioner Patty Bergin, plus a host of other allegations, including Crown is “unable to govern itself” and further allegations that major shareholder, James Packer, “had a deleterious influence over corporate governance”. In light of these allegations, the NSW ILGA believes the opening of Crown at the Barangaroo site should be delayed until at least February 2020.
The Crown chairperson, Helen Coonan, has denied the casino was “turning a blind eye” to these activities. Instead she said “It may have been ineptitude or a lack of attention, I don’t think it was deliberately turning a blind eye, I do think that’s a different adjectival conclusion”. How lame is that excuse? Unfortunately, nothing has changed since she was the Federal Minister for Revenue & Assistant Treasurer back in the early 2000s. During her time as minister, I recall taking her on about a number of superannuation issues of which she had completely wrong. She steadfastly continued with her erroneous views and refused to listen, let alone engage. Absolutely hopeless. And now? Just as egregious!
Why am I raising this? Well our dear friend Ms Coonan is the Independent Chair of AFCA, that’s right, AFCA! That’s the organisation which is supposed to be the paragon of virtue, making sure that us unprofessional, nasty & thieving persons working in the financial services industry are held to account with “fairness”.
What do you think the result would be if an adviser coming before AFCA trotted out a puerile excuse along the lines of “It may have been ineptitude or a lack of attention, I don’t think it was deliberately turning a blind eye, I do think that’s a different adjectival conclusion”?
The double standard at play here is absolutely breathtaking!
Although we need to await the NSW ILGA report in February 2021, the allegations and some of the admissions make it clear that Ms Coonan is at best ineffectual, at worst complicit in the Crown Casino shenanigans.
You’d think for the sake of probity, Ms Coonan would step aside from AFCA but no she is still there. Is AFCA incapable of looking inward and doing something about it if Ms Coonan won’t? What about the perception that the fish starts to rot from its head? What a sick joke this is!
I guess Ms Coonan is held is high esteem because she is an ex-Federal minister, plus married to Andy Rogers, QC, ex NSW Supreme Court Judge so is apparently above reproach.
What a mess successive governments & ministers have made of it…running around like headless chooks for years trying to plug perceived holes.
Next year, I’ll sit back with the popcorn and watch the disgraceful and complete shambles they’ll make of trying to implement the Hayne recommendations.
Little wonder they are challenges recruiting good quality people into the profession…who would want to get involved with this rubbish!
Why = Because no-one in ASIC is going to say anything negative about their superiors.
Class Action people time to to stand up and be counted “United we stand, divided we fall”
Why> Because ASIC IS CORRUPT
Asic has charged advisers levies for no service. None of us opted in. Where’s our refund?
These are the people who, along with Gerard Brophy, would wish to dictate to advisers as to level of our fees
AND we pay advisers fees on top of all our other fees so ASIC can go on an irresponsible spending frolic!
Where is the MINISTERIAL OVERSIGHT. This stuff only makes the spotlight when activist advisers can find politicians willing to ask questions.
So ASIC ignored repeated warnings, requests and advice and decided that as Crennan had elected to pay back the expenses, it was the best possible option.
Were they hoping that by avoiding going to the Remuneration Tribunal which would have escalated this matter and exposed it for scrutiny , it could just be dealt with in house and kept under wraps ?
So the issue was raised by the auditor general in August 2019, and the ASIC then has a briefing note on the matter in May 2020. Therefore it took the ASIC 9 months to attend to the auditor general raising the matter as a concern! Would be interesting to hear the ASIC view if an AFSL waited 9 months to attend to an audit concern and on a matter that appears to be about a lack of proper internal financial controls and processes. I think the best description is, hypocrites…..!
Yes,I had to pay levies of over $2000.00 over the last 2 years even though they reduced my income by legislation. I want the thieves to return my money back because they just wasted it .
ASIC consultation paper 333 sets out their position on what ASIC call “rolling bad apples”. I wonder if Shipton and Crennan will get a reference from ASIC for their next role. No doubt they will be treated like regulatory heroes and brag about the way they shaped the culture of the financial services industry.
Yep so basically AISC buried it until they were forced to address it.
Then being guilty Creenan jumped ship.
Speaking of ships, now doubt Shipton will be allowed to slip off into a new role elsewhere.
ZERO PUNISHMENT FOR ASIC TOP DOGS. Besides repay STOLEN funds.
Where is the banning order ? Where are the fines ?
ZERO ETHICS OF THEIR OWN REMUNERATIONS or PROCESSES.
ZERO TRUST IN ASIC – DISGUSTINGLY HYPOCTICAL AND CORRUPT.
Ironic that ASIC has made advice so expensive ($120K!) that even its Deputy Chair can’t afford to pay for it himself.