"In my view the respondents' misconduct was more
serious... it continued over a lengthy period of
time, was entirely initiated by them and executed
under their supervision," he said.
"I am inclined to think that the penalty sought by
ASIC is on the low side, having regard to the cases
to which I have been referred.
"However there are only a handful of them. In those
circumstances, it is better that I adopt the figure
as suggested by ASIC."
It was, of course, ASIC’s decision to only offer
that handful of cases.
If the judge had been informed of ASIC’s appalling
regulatory record with Storm and Emmanuel Cassimatis’
history as a dodgy financial advisor – Cassimatis
was sacked by MLC back in the 1990s – he might have
been even less impressed.
ASIC was the dopey regulator that was repeatedly
told Storm was rotten but gave the company a tick
anyway just before the GFC exposed the house of
cards. Storm, like Firepower, demonstrated ASIC
wouldn’t know if its own backside was on fire.
When ASIC isn’t outsourcing enforcement to class
action ambulance chasers, making lawyers and
litigation funders rich, it turns up after the event
to stick a Post-It Note on the stable gate: “Maybe
this should have been shut. Anyone?”
With its own failure exposed by letting scandals run
until they fall over under their own weight, the
penalties for the Storm and Firepower perpetrators
demonstrate how toothless ASIC is after the event.
ASIC staff, managers and chairmen often roll through
individual cases and the system too quickly to leave
any mark at all.
Another chairman is having a crack.
Mr James Shipton, a former banker,
has begun his term with the wan observation
that it would be nice if banks had better
culture, if bankers were more professional. No doubt
it also would be nice if everyone held hands, sang
Kumbaya and didn’t cheat at cricket.
I’ve seen ASIC chairmen come and go, usually with
brave opening statements, without the organisation
becoming pro-active. Shipton’s immediate predecessor
became a little hairy-chested towards the end of his
spell, joining in the bank pile-on, but what ASIC
has never managed is to generate a sense of
leadership with fire in the belly, a desire to kick
heads and get ahead of the game, instead of fluffing
around with soft legal niceties and culture talk
after the event.
The Commonwealth Bank, Macquarie and Bank of
Queensland were eventually dragged into paying
compensation for their roles in the Storm scandal,
but enormous personal damage and angst had already
been suffered.
I’m one who
thinks mug punters have to take some responsibility
for being mugs.
Everyone has the right to go broke
gambling if they want to.
It’s a bit rich to always try to blame a bank for
doing what you’ve asked it to do – provide a loan.
But the Storm model and many of the subsequent loans
were so egregious as to be on another level of
culpability. All the Storm gang couldn’t have been
so stupid as to not know what was happening.
When I first came across a Storm operative in
regional Queensland, it took one five-minute phone
call to a legitimate financial advisor to know all
that needed to be known: Storm was very bad news
indeed, it was doing terrible things and should only
be touched with a cattle prod.
Good people told ASIC that to no avail.
With ASIC satisfied with such limp and limited civil
penalties, maybe it’s time to turn an inquisitive
blowtorch on the supposed regulator, rather than
give it more responsibilities. Storm, Firepower,
Nant et al – ASIC is an embarrassment.