ASIC chair Joe Longo says the focus on big business is ‘sensible’ given the potential for harm

The corporate regulator says its priorities are focused on dealing with harm to consumers from the big end of town, despite criticism it has failed to act.

ASIC chair Joe Longo during the ASIC annual forum at the Sofitel in Melbourne. Picture: Aaron Francis

Australia’s top corporate cop says pursuing bigger businesses is a “sensible” enforcement strategy, but has pushed back against criticism, claiming it is also a keen litigator against smaller operators.

Australian Securities and Investments Commission chair Joe Longo said the regulator was “very active” in chasing small entities, warning “a lot of entities we litigate against … (are) not that big”.  Mr Longo said ASIC was more active in pursuing bigger companies because their misbehaviour affected “thousands of people”.

“I think any sensible enforcement strategy has to take that into account,” he said.

“We have limited resources, we have to act in the public interest.”

Speaking on the sidelines of ASIC’s Annual Forum in Melbourne, Mr Longo said it was “odd” that the regulator’s critics attacked it for failing to take action against corporate crime, pointing to the record of hundreds of actions and court ­judgments.

“I would challenge you to find any other regulator in Australia that runs as many cases as we do, civil and criminal and is as active as we are in court,” he said.

ASIC has faced criticism as a Senate economics inquiry led by Liberal Andrew Bragg heard stories of the regulator’s failures to act on reports of misconduct.

Senator Bragg, who has slammed ASIC, is preparing to publish a report into the regulator with a number of recommendations to reform the agency.

Mr Longo said he expected to sit down with the economics committee next year to work through the “concerns and issues”, but would not be drawn on any proposals to further reform or empower the regulator.

Speaking earlier on Tuesday, ASIC deputy chair Sarah Court said the regulator was “not resourced to investigate all potential breaches of the law”.

Ms Court said ASIC made “no apology” for its focus on big ­business.

“We make careful choices about the matters we take on. We select matters with the broadest possible reach, such that our work will have a deterrent effect well beyond the particular matter we are prosecuting,” she said.

“In practice, this means that we inevitably take more civil actions against what might be called the ‘big end of town’.”

Ms Court said misconduct by large firms “causes the widest consumer and investor detriment”.

“And we are bold, in that we are not conservative in the cases we take on. Where we consider there to be harm, or potential harm, we take cases where the outcome is not guaranteed,” she said.

ASIC chair Joe Longo during the ASIC annual forum on Tuesday. Picture: Aaron Francis

On Tuesday Treasurer Jim Chalmers revealed he would soon task ASIC with a number of new priorities under a new statement of expectations for the regulator, the first since 2021.

Former treasurer Josh Frydenberg handed ASIC its last list of tasks, calling on the regulator to support “Australia’s economic recovery from the Covid-19 pandemic and work closely with government and Treasury on the implementation of policy reforms and in its exercise of policy-­related functions”.

But on Tuesday Dr Chalmers said he would ask ASIC to focus on protecting consumers in the “digital sphere”, and addressing the risks and capturing the opportunities of the market’s transition to net zero.

Former ASIC chair James Shipton, who has previously called for the Albanese government to issue a new statement of expectations, said the new priorities were “urgently needed”.

“I encourage oversight bodies like parliamentary committees and ministerial departments to apply a consistent regulatory performance framework benchmarked against the agency’s statutory objectives and its statement of expectations,” he said.

“A significant fault line in Australia’s current regulatory architecture is the absence of meaningful and effective ongoing oversight of critical regulatory agencies, like ASIC.”

New Zealand’s Financial Markets Authority is given a new statement by the government ­annually.

Ms Court revealed ASIC’s priorities for 2024, warning the regulator would broadly focus on business misconduct, financial services and credit providers, company failures, auditors and liquidators, and technological and operational resilience. Ms Court said ASIC would focus on conduct involving small business.