ASIC Deputy Chairman, Jeremy Cooper, has taken
understandable umbrage at a line or two in our October 31 spray about dodgy
valuations and high-yield debentures, with the most offensive par probably being:
Please note that those
first “shots” (make that “a small decorative firework”) were fired back in
February but the issue seems to have progressed no further than pulling a
prospectus. One thing for sure, the doctrine of pre-emptive action hasn’t reached
That story was in
turn commentary on a very nice yarn by Paddy Manning in The Weekend Australian
about one of the dodgy ends of the finance market. It’s here and well worth a read. Manning in part wrote:
ASIC has finally zoomed in on the issue – which has become
something of a mission for deputy chairman Jeremy Cooper, a lawyer who joined
the commission a little over a year ago.
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DC Cooper’s full correspondence is here on the Crikey website. He shows that the watch puppy has indeed been more active than the
impression I created.
And it’s a hard job for the regulator. Investigations take
time and effort. The shonks have plenty of good lawyers at their disposal.
There are so many smelly propositions out there and only so many noses.
However, if you have the time to follow each of the
proffered ASIC press releases through,
it still looks like there’s more feather whipping than cat o’ nine tails going
on. An unlicensed managed investment scheme has been wound up here, supplementary
prospectuses issued there and even a stop order – but it all feels a long way
short of a head on a pike.
Yes, I know this isn’t Singapore,
but ASIC has set the standard of its powers of pursuit with its insider
action against Rene Rivkin, which was fine by me. Compare and contrast
that with, say ASIC’s media release
concerning the failed Elm Financial Services Group.
Here’s an operation which, on ASIC’s allegations, looks nasty
and grubby in its targeting of country town
retirees. The biggest penalty so far seems to have been a permanent ban on
Dennis Howell Terracini being involved in the financial services industry plus court costs of
$50,000 and $150,000 compensation to creditors. A
fellow director, Grant McCartney, copped $50,000 in costs and a five-year ban
from managing corporations.
On the Rivkin scale of both crime and punishment, it looks
significantly worse on the first and much, much lighter on the latter.
I asked ASIC this morning whether there was any further
action pending and was told the investigation is on-going. The central issue of how quick (or slow) ASIC is to act on complaints
was at the core of Ben Hills’ weekend report on conman Kovelan Bangaru.
It adds to the impression that ASIC waits for several
complaints of decent monetary size before moving – by which stage it is often too late.
It is good to see Mr Cooper’s program on high-yield
debentures apparently being more pro-active. Let’s hope it catches on.
And ASIC of course is not alone. Ben
story details how the NSW Department of Fair Trading and the Mortgage Industry
Association of Australia also failed to act on Bangaru. There is nothing new or exclusive about watch