Apr 18, 2018

AMP treated the corporate regulator with contempt — understandably

The banking royal commission has shown how utterly contemptuous of the ASIC Australia's biggest firms can be.

Bernard Keane and Glenn Dyer

Politics editor / Crikey business and media commentator

AMP's Anthony 'Jack' Regan leaves the Commonwealth Law Courts Building in Melbourne.

A couple of past statements by Treasurer Scott Morrison now look particularly silly after yesterday's catastrophic royal commission hearing into AMP.

One was just two weeks ago, when -- still in "we don't need no stinkin' royal commission" mode -- he said the commission had so failed to produce anything the government didn't know. One wonders if he still thinks that. Did he know that AMP had lied over 20 times to ASIC? That it had a deliberate policy to keep charging clients for advice even when they weren't receiving any advice, nor was there any adviser to provide it? That AMP knew this was illegal but did it anyway? That the board grossly interfered with an report by a law firm (Clayton Utz, which was apparently fine with the whole process) into the matter that it then presented as "independent" to ASIC? Funny, he stayed awfully quiet about it if he did.

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26 thoughts on “AMP treated the corporate regulator with contempt — understandably

  1. Smit

    >In the absence of such powers, AMP’s board should resign forthwith.
    I think you meant that the ASIC board should resign forthwith.

    1. Robert Smith

      From reading the paragraph he meant AMP. However if ASIC has a board they should as well – good idea, thanks for the suggestion.

  2. paddy

    Each session of the RC seems to provide a new “jaw on the floor” moment.
    I guess the senior execs just don’t think it really matters what they say.
    They’ve routinely spouted cant and BS at the media and ASIC for years and never had any real blowback. It would be fascinating to see how they’d react, if Labor should happen to win a federal election before the RC finishes.
    Such sweet schadenfreude. 🙂

    1. AR

      You are assuming that Labor has the will, never mind the courage, to do the right thing.
      That is quite heroic.

      1. michael dwyer

        Labor people with a long memory can recall the Insurance companies’ campaign against the proposed Australian Government Insurance Corporation in 1975. The Hawke government did not revive the plan.

      2. Arky

        Labor has been leading the charge for the banking RC for ages, and the banks have literally bankrolled attack ads against Labor, so… um, I’m confident they will put the boot in.

        1. AR

          … aahhhh, that’s so sweet. Unicorns & magic ponies for all.
          Remind me again, who was the architect of the policy of encouraging BigBanksterism, selling off the Commonwealth and allowing thatcherism to run riot in the 80s.
          Foulmouthed, skinny bloke, too dumb to realise he was being snowed by Treasury and too eager to get his knees under the big table to give a flying for the Labor.

      3. doncard

        what is the Yes Minister expression?

    2. Dog's Breakfast

      I’m inclined to agree Paddy, except about the jaw on the floor commentary. 20+ years of stories have come out that clearly showed the financial sector had ‘gone rogue’, and I would have called the RC a sham if it didn’t flush out these turds. I’m expecting more horror stories up to the end of the year, things that you couldn’t and wouldn’t believe were happening, because people just assume others to not be complete and utter avaricious bastards, and they are wrong across the Finance, Insurance and Real Estate sectors. (FIRE)

      What I really want to see is the Royal Commission extended at least another 6 months, for jail terms for false declarations to the regulators, for a summary abandonment of the current regulators and a complete re-think with the assumption that where large pots of money aggregate you will find the most egregious and dastardly of human beings.

      Jail time is required, and not at the extreme end, for mid-level corruption and upwards, and huge fines for companies and any directors found wanting in their social licence.

      Buggers, all of them.

  3. leon knight

    ASIC with teeth and determination would be great, but a Federal ICAC is desperately needed too… have to wonder whether blatant liars like Morrison and Turnbull were getting kickbacks somehow to fend off the RC.

  4. Administrator

    The Australian clearing banks are an oligopoly. The size of our Four Pillars combined now exceeds the market cap of all the banks of Europe combined. How did it get that way? Absence of competition and absence of regulation. As once said, “What’s the point of market power if you don’t abuse it?”
    The only surprises from the banking inquiry are the details. The culture of oligopolies will always produce ripoffs… see supermarkets, airlines, utilities, communications carriers.
    ASIC has always had power to investigate and expose. Its shortcomings in penalties and sanctions are no excuse for inaction.
    The responsibility for inaction and the resultant ripoff culture lies firmly with ministers.
    When the banks asked government to guarantee deposits at the height of the GFC, that was necessary because “reserve deposits” were insufficient to withstand a run of customer withdrawals. The banks had promptly loaned the funds of all savers to finance home-buying at inflated prices. Can you believe the government gave them that guarantee for free? Yes, Australian savers subsidised bank shareholders by government decision. I want my money back. Now.

  5. AR

    It is odd to hear so many top executives in the finance rip-off sector, required on oath to tell the truth, squirm and equivocate and try the usual obfuscation which has served so well for decades being brought to heel by the simple, forensic questions of various Counsel Assisting.
    It even makes me feel that perhaps lawyers do have some function other than worm feed.

  6. Bill Hilliger

    I’m lucky to be in a very good and well performing industry super fund and enjoying income from it in retirement. What bothers me most, is that Kelly “I’m not a dolt” O’Dwyer is working hard giving the industry superfunds the NBN treatment. Her aim is placement of management persons currently involved with the retail super funds / banks to provide moral guidance to the industry super funds in respect to ensuring a lessening of industrial unions influence on how these funds operate. I can see the LNP government overseeing an exodus of the discredited banksters and AMP spivs to infest the industry super funds. Given the success of the NBN is being used as a guide on what to achieve on the so far above average performing industry superfunds, I sincerely hope these LNP maggots are voted out of office before any irreparable damage is done.

  7. Jocelyn Pixley

    A good article, and the comments are useful too. Can I add one point? Peter Costello set up ASIC, along the lines of the Efficient Market Hypothesis (EMH). How much that has sunk without trace inside ASIC I do not know, but the ‘thesis’ sank with the GFC. The first head of ASIC liked the EMH, I heard him say that at a conference; its problem for regulators was that companies could say anything in the ‘fine print’. As long as they mentioned vaguely some such possible misdemeanour, for which they would not be held responsible, and wrote Caveat Emptor everywhere, ASIC was structurally toothless.

  8. [email protected]

    Give him a wet broccoli, I reckon. And then send him foraging for coconuts. Stop relying on a system based on fossil fuel based capital. It naturally leads to corruption. The whole nation state is based on the corrupt stealing of land. Really what do we expect.

  9. Gregory Bailey

    Arguably ASIC and APRA were always set up to fail, as they have been quite ineffective, wilfully, in stopping the kinds of systemic rorts being exposed by the Banking Royal Commission, and by APRA’s reluctance to investigate scandals associated with dodgy real estate deals and investment schemes. The people at the top of these organisations are not going to come down hard on recalcitrant offenders because they come from the same background as they.
    It is a distinctive component of a neoliberal polity–that trumpets the idea of the level playing field–that there must be some “independent” bodies that will protect the little person against the large monied corporations. In practice these bodies do no such thing, are not independent, and create an ineffective fiction that something is being done.
    Regrettably the majority of the population expect that nothing will be done, expressing a mixture of stoicism and the attitude that “they’re all crooks anyway.” This allows the regulatory bodies to do nothing.
    Presumably it will be these bodies that will be expected to execute any of the recommendations – if they is anything other than broad platitudes – handed down by the royal commission, and so the culprits will be free to continue their winning ways. And, finally, from a political perspective, the LNP and the ALP are equally culpable for this situation as both are still pervaded by neoliberal ideology.

  10. bushby jane

    I reckon that everything Scomo says is silly. He was on the radio yesterday telling Sabra Lane, who is also silly, skiting that labor didn’t want the RC to include insurance companies and look what we have found sort of thing. I thought that AMP was being included at the moment for its financial services division misdemeanours, but his spin as usual dismissed that small detail, as did apparently Sabra Lane.

    1. DF

      Meanwhile, Sarah Ferguson, the only person at the ABC with the guts and brains to go after the crap artists, has been assigned to essentially nothing. Sarah, La Trioli and Ellen Fanning are the only journos worth listening to on the ABC. The men are all eunuchs.

      1. leon knight

        Sadly you are right about the ABC, but at least the tone of the political journalism has improved since Uhlman buggered off.

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