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ASIC enforcement updates

August 20, 2019

 

 

 

Earlier this week, Australian Securities and Investments Commission (ASIC) shared their enforcement update for the period between January and June.

 

 

The above table was taken from the ASIC report published earlier this week.

 

While ASIC lost their test case against Westpac last week, The ASIC Podcast addressed their enforcement outcomes in financial services and markets.

 

Speaking on the podcast, ASIC Commissioner Daniel Crennan said ASIC is investigating case studies related to those highlighted in the final report of the Royal Commission into Misconduct in Banking, Superannuation and the Financial Services.

 

Additionally, Crennan spoke to the issue of legal professional privileges (LPP) that arose during the Royal Commission hearings—noting the instance where they sought documents from Clayton Utz but where stymied by claims the legal notes were protected by privilege.

 

In that instance, LPP was not upheld and the legal notes were provided to the corporate regulator.

 

“We do expect parties in litigation with us to adopt pragmatic approaches such that claims of legal professional privilege and other interlocutory applications or rights sought to be invoked are looked at through a pragmatic prism, such that they do not in any way stultify litigation and do not in any way result in long-drawn litigation with very little alteration the result,” Crennan said.

 

A day after this release, the corporate regulator disqualified Cairns-base director Paul Corradi for five years for his involvement in the management of seven failed companies. The total amounts owing from the failed companies is $2 million.

 

Penalties are still expected in the ASIC case against Westpac for the bank’s breaches against best interest laws.

 

“This is another instance where admission of contraventions have been made and, as I’ve said earlier, in appropriate circumstances, where large entities make admissions to contraventions, that certainly does result in a much-curtailed litigation process whereby both entity and regulator can move on to the penalty phase and are there open to heatedly disagree with each other as to what penalties are appropriate,” Crennan said.

 

Last week, Justice Nye Perram ruled against ASIC in their allegations against Westpac’s inquiries and use of the Household Expenditure Measure (HEM) to assess a borrower’s eligibility for a financial product.

 

Crennan said ASIC will be pursuing more cases with their ‘why not litigate?’ philosophy.

 

The podcast calls for industry to look for their updates on fees-for-no-service terms.

 

End

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