ASIC’s defence: Why we didn’t investigate the RBA

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ASIC has defended its inaction against the RBA and its former subsidiaries Securency International and Note Printing Australia.

The corporate regulator has publicly responded to questions from ABC’s four corners, about why it didn’t investigate the RBA’s involvement in the Securency International scandal.

The response follows leaked reports that officials from the RBA's Note Printing Australia (NPA) went to Iraq and engaged in secret dealings with the regime of dictator Saddam Hussein at the height of UN sanctions.

In 2012, ASIC said that it would not pursue a formal investigation after the Australian Federal Police (AFP) provided it with material relating to bribery allegations against Securency International and Note Printing Australia. It was alleged that the companies bribed foreign officials to secure banknote contracts.

“Let me be absolutely crystal clear,” said ASIC Commissioner Greg Tanzer, “ASIC looked at this matter very closely, but based on the facts and the evidence available, decided not to take the matter further. What we did do, was review more than 10,000 pages of documents, including several detailed witness statements provided by the police.”

The material that ASIC examined related to alleged conduct in Indonesia, Malaysia, Vietnam and Nepal.

“As there are related prosecutions before the Court, we are not in the position to detail publicly all of the reasons for our decision but the public can be completely and utterly confident in what ASIC did.”

Tanzer cited ASIC’s enforcement history as a reason why people should have faith in the regulator.

“For instance, last year we completed 187 investigations, we kicked 88 people out of the financial services industry, we convicted 22 people and we had 9 sent to jail,” he said.

This included 11 people being jailed, banned, disqualified or removed from the industry for more than 50 years in relation to Trio Capital; An enforceable undertaking from Macquarie Equities; The largest fine in ASIC’s history ($500,000) handed down to Ponzi scheme “mastermind” David Hobbs; And actions against rogue CBA advisers.

ASIC has released a follow-up statement saying that the Iraq bribery allegations will be considered but that a six-year statute of limitations applies to civil penalty cases.

  • ml on 1/10/2013 9:54:59 AM

    How can anybody take this outfit seriously, and they fail to mention the hundreds of investigations against advisers that went nowhere, because they were merely a fishing expedition, and yet they've done nothing about the activities of numerous company directors who have cost investors millions of dollars in lost investments because of their shonky and fraudulent activities. Seems there's two sets of rules......

  • Concerned on 1/10/2013 10:11:08 AM

    Regardless of the number of successful outcomes it is not the point. It would not matter what figures are used to justify their behavior which frankly seems to miss the point. Maybe there should have been a reallocation away from the adviser investigations towards a further investigation into such accusations and activities.

  • Cappy on 1/10/2013 10:49:29 AM

    Please ASIC, RBA issues relate to boardroom fraud do we have to spell it out. It is "crystal clear"

  • Warren on 1/10/2013 11:43:06 AM

    You ask for positive industry interaction.
    How can we be positive with this shameful stuff perpetrated by Institutions and condoned by the regulator. Come on Tony be the first Liberal Government to pull the big end of town into line.

  • Alistair on 1/10/2013 3:58:24 PM

    Once again the intellectual derelicts at ASIC are found wanting. Heads of the Reserve Bank, Note Printing Australia and Securency. Taxpayers money wasted on bribes and ASIC didn't know. So much for credibility.
    They have the hide to say about our FP industry that:
    Tanzer cited ASIC’s enforcement history as a reason why people should have faith in the regulator.

    “For instance, last year we completed 187 investigations, we kicked 88 people out of the financial services industry, we convicted 22 people and we had 9 sent to jail,” he said.

    These are small fish and gives the impression that they are tough. Meanwhile boys and girls this is only true if you also believe in the tooth fairy and that pigs can fly.

    All the while the heads of Corporations who run dodgy investment schemes such as Great Southern, Timbercorp and a host of others and such Mortgage Schemes like LM, or property trusts like Prime Property are seemingly able to largely go unpunished. Lets not forget your FAI heads and others.
    Seriously, this bunch of keystone cop tea drinking biscuit eating fancy titled morons belong at the end of a dole queue.
    Its time for the ministers in charge of this pathetic excuse for a regulator to have a look at the Organ grinder that is merely a rubber stamp for the scam artists in the investment industry. These are not the advisers for the large part. Under this mob, any nitwit can create a scam of an investment scheme, rob people blind knowing that the cop on the beat is asleep.
    In the 1990's we had the National Companies Securities Commission under Henry Bosch. Calamity after calamity in the investment world - nothing to very little done as they arrive on the scene after the disaster and loss of money of tens of thousands of investors.
    Result advisers punished then. Not the scheme creators.
    Fast forward 23 years and here we go again.
    This time even worse as International Laws are broken and a massive cover up occurs and you guessed it - the cop is asleep again.
    I wonder if our industry will get punished for this stuff up ? They need to appear tough after all its good for the marketing and to justify their existence in a job. After all we in the FP industry seem to be the scape goat.
    Its time incompetent arrogant halfwits like this were replaced with competent people.
    ASIC - as a corporate cop is a lousy regulator. The Four Corners report simply highlights systemic incompetence which needs to be cleaned out. Hence the inaction
    on this current scandal involving the Reserve Bank and its companies and the failure of this lot to protect the consumer from scams be it in share market schemes, managed funds, investment schemes, property scams etc

  • The Naked Adviser on 2/10/2013 11:58:05 AM

    Are we really surprised? That amount of evidence, yet ASIC not prepared to step up. Maybe ASIC can find a far more dangerous problem to deflect its own failings like "Churning". Any faith I had in this regulator is gone.

  • gf on 2/10/2013 12:36:12 PM

    Has anyone thought the regulations the RBA was created with, are probably the same rules as the American Fed Reserve creation. Both these entities probably pretend to be answerable to Pollies where in fact they are not. Its window dressing to appease us citizens. Is this why it did not progress further?

  • James Howarth on 30/10/2013 2:08:47 PM

    Dont forget to make these attitudes known to the senate enquiry. Submissions close tomorrow, 31st Oct.

    ASIC creates complacency in investors. The cost of ASIC on the community is far too high. All dealer group fees and costs are a regulatory cost that is passed on to the consumer. Including adviser time spent on compliance the cost is astronomical.

    ASIC only mop up the mess rather than prevent it.

    Greg Tanzer should be let go if Australia is a meritocracy, a Gillard pal. Is Australia a meritocracy? We will soon find out.

    ASIC is complicat in conflicted advice as 85% of bank based advice goes into bank products of the advisers dealer group owner. (ASICs own statistics)

    All large dealer groups end up being bought out by banks.

    Dealer groups need to be removed from the regulatory process if ASIC is serious about non conflicted advice.

    Direct licensing of advisers by ASIC or get rid of ASIC altogether.

  • John walker on 2/10/2013 7:54:26 AM

    My colleagues comments above says it all.... ASIC which is run by incompetents go for the soft targets .... The financial adviser... Something akin to the police catching naughty drivers with radar.... But murders. Corp crime all in the too hard basket

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