ASIC chair Joe Longo backs deputy Karen Chester against Treasury conduct review

ASIC chair Joe Longo has defended his deputy over questions of conduct and denies the regulator has a workplace culture problem.

ASIC deputy chair Karen Chester. Picture: David Geraghty

The chair of the Australian Securities and Investments Commission, Joe Longo, has rejected suggestions that there are cultural problems within the corporate regulator, following a Treasury investigation into the conduct of deputy chair Karen Chester.

Appearing before the Parliamentary Joint Committee on Corporations and Financial Services on Thursday, Mr Longo tabled a letter to him by Treasury Secretary Steven Kennedy a year ago which “found that many of the instances of alleged conduct (by Ms Chester) could be wholly or partially substantiated”.

But Mr Kennedy had concluded that there was “insufficient basis” for any further action to be taken.

ASIC chair Joe Longo. Picture: David Geraghty

Mr Longo said the allegations against Ms Chester were around events which happened “at a certain historical point in time” before he became chairman in June 2021.

He said he had had the opportunity to work with Ms Chester and did not see any conduct which concerned him.

Senator Claire O’Neill said that “bullying” was a “very common occurrence” in white-collar situations, and asked Mr Longo for an assurance that there were “no cultural problems at ASIC.”

Mr Longo responded: “I don’t think there is a cultural problem at ASIC.

ASIC has a very good culture.”

The issue of the complaint against Ms Chester was raised in Senate Estimates a week ago when Mr Longo indicated that Mr Kennedy’s letter showed the inquiry had made no adverse findings against her.

Treasury Secretary Steven Kennedy. Picture: Gary Ramage

On Thursday Mr Longo handed the committee the exchange of letters between him and Mr Kennedy last year which show a more critical tone in Mr Kennedy’s letter.

Mr Kennedy said that the investigation had “found that many of the instances of alleged conduct (by Ms Chester) could be wholly or partially substantiated as to the fact that specific things occurred”.

But he said recollections differed “about its specific conduct and its substance and significance”.

He said he had come to the conclusion that there was “insufficient basis” to take any further formal steps and referred the matter back to Mr Longo.

Mr Longo wrote back to Mr Kennedy in February last year saying he did not intend to take the matter further.

Mr Longo told the committee on Thursday that he had decided that there was “no utility in revisiting the issue” and that he would not proceed with any actions under ASIC’s code of conduct.

Ms Chester, who was also at the hearing on Thursday, said she did not want to make any further comment.

Originally published as ASIC chair Joe Longo backs deputy Karen Chester against Treasury conduct review