The failure by ASIC to win its insider trading case against Citigroup in the Federal Court yesterday will end up costing taxpayers millions of dollars in legal and administrate fees. The corporate regulator engaged no less than three — yes, you read it right — three silks and a junior. And Citigroup had two silks and three juniors acting for it, briefed by Freehills. One of Citigroup’s silks was the mightily expensive Alan Myers from Melbourne.

So was this expenditure by ASIC a reasonable use of taxpayers’ money? It is always easy to be wise after the event, but given media speculation today suggested that ASIC might have decided to go after Citigroup as a means of helping to restore its reputation after the Steve Vizard case where it had been accused of letting the former TV show host off the hook, it is a legitimate question. It is not the first time that regulators and prosecuting authorities in Australia have been accused of going after “big fish” in order to enhance their reputations.

Which leads to a second question – who watches the regulators and prosecutors? Who ensures that before big licks of taxpayers dollars are spent chasing high profile scalps, the case is watertight? After all, if this had been action taken by Citigroup against ASIC, and the former had been as comprehensively beaten in the Federal Court as ASIC was yesterday, heads would most definitely roll, as shareholders of the bank demanded some accountability from Citigroup for the flawed decision making.

Perhaps the Citigroup case presents an opportunity to rein in the regulators. This is not to say that they should be hamstrung in enforcing the law and ensuring fairness. But surely the Australian community is entitled to be assured that their money is spent wisely by law enforcement agencies and regulators.

One final thought. If the major reason for ASIC’s pursuit of Citigroup was indeed a knee jerk reaction to the negative publicity it received over the Vizard case, rather than a cool and clinical assessment of the merits of bringing on litigation, then all Australians should be concerned at such an abuse of power.