South Australian senator Rex Patrick is calling for ASIC’s new chair, James Shipton, to provide the public with a statement as to the confidence he holds in his commissioners in light of the damning evidence heard by the Hayne royal commission.
Mr Patrick said that while the “shameful disclosures” of wrongdoing at the banking royal commission have already taken the scalps of AMP chief Craig Meller and chair Catherine Brenner, senior executives at ASIC are yet to accept responsibility for their failure to properly regulate Australia’s leading financial institutions.
“Senior officials who are given responsibility and authority for public purpose must be held to account when that public purpose is not fulfilled,” the senator said.
“In earlier times, ASIC commissioners would have already fallen on their swords; they should not wait any longer to do the right thing and take responsibility for their failures.
“While ASIC chair James Shipton has only been in charge of the corporate regulator for three months, other ASIC commissioners have all been in place for some time and must bear significant responsibility for the financial horrors that are being revealed by the royal commission.”
Mr Patrick noted that ASIC’s Peter Kell has been the deputy chair for five years and prior to that was a commissioner. Meanwhile, John Price has been a commissioner for six years and has more than fifteen years’ experience at ASIC in regulatory roles relating to financial services and products, licensing, insolvency and financial reporting and audit.
Cathie Armour has been a commissioner since 3 June 2013.
“The terms of these commissioners have included plenty of public warnings and whistleblowing about misconduct in the banking sector, and indeed warnings from within ASIC itself. Yet more often than not, the response of ASIC is to shoot the messenger on behalf of the banks,” Mr Patrick said.
The senator cited former ASIC lawyer turned whistleblower James Wheeldon, who observed in evidence to a previous Senate inquiry into financial services that ASIC “has long had a culture of subservience and acquiescence when it comes to the major banks and financial institutions”.
Mr Patrick argues that ASIC’s senior executives are directly responsible for a “softly-softly regulatory approach” that has been characterised by a marked reluctance to take robust law enforcement action in relation to the banks and other financial institutions.
The senator is calling for long-serving ASIC commissioners to consider their positions in light of the “appalling revelations” at the Hayne royal commission of financial sector misconduct and theft.
“If they are not prepared to do that, the chair of ASIC may need to act,” the senator warned.
“For far too long, there has been a great reluctance for senior executives in both the private and public sectors to accept personal responsibility for failures of performance and governance.
“Ultimately, however, the buck must stop with someone — and that includes commissioners and other senior executives at Australia’s corporate regulator.
“It is already clear that ASIC will need to undergo considerable reform and a shake-up anyway.”
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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