Whistle-blower: ASIC's culture to 'shift blame'

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The whistle-blower who Australian Securities and Investments Commission allegedly ignored has provided two more submissions to the Senate inquiry into ASIC’s practices, detailing how ASIC confirmed the whistle-blowing matter was within its investigation powers but decided to do nothing.

The former ASIC and JP Morgan employee told Wealth Professional he has now provided two additional submissions to the Senate to support his original submission, which state how he tried to discuss alleged dodgy dealings at JP Morgan but ASIC allegedly ignored him.

These included misleading reports being provided to head office and trades not booked into systems and only being tracked by paper-based legal agreements – which would be torn up if required, therefore leaving no trace, said the man, who worked within the team that regulates Australia’s stock exchange.

The subsequent submissions from the whistle-blower explain how ASIC internal documents confirm the matter was within its jurisdiction and of high regulatory impact, but conclude “since it wasn’t ASIC itself which had made the discovery nothing would be done”, he told WP.  

“ASIC even finalised the complaint one month before I even met ASIC staff to discuss the matter and provide information.”

To back his claims, the man provided to the Senate copies of ASIC’s final assessment and online complaint form regarding his whistle-blowing report.

According to the copied documents, ASIC confirmed the allegations against JP Morgan were within its jurisdiction as it involved “fraud, dishonesty or gross negligence” and more than 25 people were likely to be affected. It also found if JP Morgan’s alleged misconduct was proven it would attract a substantial penalty.  

However, ASIC concluded there was insufficient evidence to investigate.

In his second submission, the man also said while he was an ASIC employee between 2010 and 2013 he prepared documents for ministers, the Senate and Parliament on instruction from the corporate watchdog to avoid or remove content which could lead to difficult questions.

“The Senate should be aware that there is a culture within the agency that seeks to maintain appearances, shift blame, is uncooperative, and obscures issues.”
The man said on one occasion ASIC did not investigate a company which failed to repay investors, despite the man raising areas of concern to an ASIC senior manager. The reason ASIC did not investigate was “no investor had complained to ASIC”, he said.

On other occasions he alleges he was berated by a senior manager for discussing ASIC’s poor assessment standards, who reportedly said “ASIC didn’t care about such matters and that another regulator could bother about them”.

An ASIC spokesman said the commission has no comment on this particular submission.

"We take all submissions very seriously and will let the inquiry run its course."

So far there have been 399 submissions made to the Senate about ASIC and three ASIC has made in return.


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  • hesreto on 20/02/2014 12:37:55 AM

    Totally agree with both comments. ASIC are the sleeping dog. Too many lives have been ruined to allow this to continue. We are treated with apathy while crooks are running the show, worse still on the increase. Now is the time. Do away with the waste and do us all a favour. At their measely 'success figures' we may as well not have a Regulator at all and hope for the best, it's pretty much where we are now but 450mill poorer. But the money into aged care and let the crooks run rampant as they do now under the sleeping eyes of our Regulator.

  • Alan on 7/01/2014 10:31:11 PM

    Yeah totally agree Martin, ASIC are a lazy incompetent fearmongering organisation who are only worried about chasing up the easy small stuff. They can't be bothered with the really serious issues where peole are likely t o lose millions, e.g. Storm Financial. Why are they creating a climate of fear and intimidation which is completely counter productive and serves no purpose except to piss advisers off? I agree, the new government should close them down and set up a new efficient regulator that is there to assist all stakeholders in achieving best practice without the threats. But I'm not holding my breath for that to happen.

  • Martin B on 7/01/2014 10:27:40 AM

    Not surprising. There are many stories of ASIC ignoring warnings and failing to act. They prefer to chase large organisations for minor disclosure issues rather than chase the real problems. Storm Financial is a classic case. Under direct licence of ASIC who condoned the Stormification strategy by default and then only reacted and blamed others when it blew up. They need to be closed down and a new corporate watch dog that understands real risk to be established. Obscure disclosure documents do not protect investors from dodgy operators with no professional liability cover. Stop chasing the easy stuff which is government funded and that is of little consequence and start looking into the real issues out there. ASIC must stand for A Sweet Income for Corporate Watchdog. Disgusts me.

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