ASIC reveals sharp increase in investigations

Pedro Gonçalves
ASIC reveals sharp increase in investigations

The Australian corporate regulator sharply increased its enforcement actions against the major financial institutions in the four months to February, one year on from a Royal Commission lambasting.

According to ASIC's enforcement update for September 2019 to February 2020, the regulator saw a 52% increase in enforcement investigations involving the big four banks and AMP from January 2019 to January 2020. Overall, the corporate regulator's enforcement investigations increased by 10% over the last year, with 316 investigations currently underway across ASIC's full breadth of jurisdiction.

The Australian Securities and Investments Commission's report said its staff were at the institutions for 216 days over the period and conducted 739 meetings with banking staff at all levels. That's every second day between October 2018 and December 2019.

We have significantly increased the resources dedicated to referrals and case studies from the royal commission"

"We are expediting the finalisation of our royal commission-related enforcement work through the strategic use of increased funding from the government."

ASIC said the investigations related to directors' and officers' breaches, insider trading and market manipulation, auditor and liquidator breaches, and breaches of licensing obligations, including Australian financial services license obligations.

The Office of Enforcement has used ASIC's expanded toolkit, including new and increased civil and criminal penalties, to take action in response to market, corporate and financial sector misconduct, the regulator said.

ASIC said it would continue to prioritise taking action on "certain types of misconduct" including misconduct by individuals - particularly criminal conduct - or governance failures at a board or executive level.

The watchdog says it will continue to put other cases before the court under its newly adopted ‘why not litigate?' approach which aims to deter emerging misconduct across the financial services sector, and has been backed by increased funding from the government.

"We have significantly increased the resources dedicated to referrals and case studies from the royal commission, which focus on contraventions of the financial services and credit laws by a range of financial institutions, superannuation trustees and insurers," ASIC added.

ASIC's newfound approach to regulation comes after it faced heavy criticism from Hayne, who said the regulator needed to adopt a tougher approach.


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