Chairman Jeff Lucy has described my comments that ASIC was soft on
Vizard as “quite outrageous.” But the more ASIC explains, the more it
seems that I was right. Unlike the Bourbons, ASIC has learned nothing
but forgotten everything.
Today’s Financial Review front-page article by Andrew
Main quotes ASIC sources as saying that the refusal of a witness Greg
Lay to give evidence against Vizard was the reason for there being no
criminal charges. This, then, is ASIC’s belated explanation.
this is simply wrong, and ASIC knows it. The truth is, Lay (or anyone
else) can be forced to give evidence. Let me explain (Prosecution
ASIC regularly refers matters to the
Australian Crime Commission, who have coercive powers. The ACC issues
summons to all the persons involved (including Vizard) to give evidence
and produce the documents. These witnesses cannot refuse to give
evidence: if they do, they face jail under the ACC Act. The only
qualification to this power is that evidence from Lay cannot be used
against Lay in a criminal trial, but it can be used against Vizard
(that is the whole point of the ACC).
Once Lay is compelled to
give evidence and produce documents, Vizard can be charged with the
jailable criminal offence of insider trading. At the trial, Lay is
subpoenaed. If he refuses to give evidence he faces jail for contempt
of court. If he does give evidence then Vizard should be convicted. He
must give evidence in accordance with his previous ACC evidence
otherwise he faces jail for perjury. Lay could also be indemnified
against any prosecution of himself. These procedures are used all the
time. Lay has nowhere to go – he must give evidence.
For ASIC to
suggest that no prosecution could proceed because any witness refused
to give evidence is demonstrably false. What, then, are the true
reasons for this matter not proceeding as a criminal prosecution?
CRIKEY: We contacted the Australian Crime Commission to find out
whether the ACC could have compelled Lay to testify at
ASIC’s request. They referred us to the ACC’s 2003-04 Annual Report and
section 28 & 29 of the ACC Act. Basically, the ACC can coerce witnesses to give evidence, but reserves
this special power for “circumstances where traditional methods of law
are not sufficient to combat sophisticated criminal activity.” This
coercive power is deployed at the Board’s discretion and is only used
in relation to “special intelligence operations” or “special
We also contacted ASIC to get a comment from Jeff Lucy but he wasn’t
quite able to meet our (admittedly short) deadline. We’ll run Lucy’s