ASIC faces Senate criticism, even as its enforcement update reveals it imposed $109m in fines

ASIC has revealed it laid 125 criminal charges and secured 14 custodial sentences in the six months to June this year – but that hasn’t soothed Senate tensions.

ASIC deputy chair Sarah Court. Picture: Ian Currie

Members of the Senate have clashed with the government as an inquiry into the corporate regulator faces roadblocks over attempts to have it divulge information into several past investigations.

In afternoon hearings on Wednesday, senators lined up to take shots at the Australian Securities and Investments Commission and the Albanese government as an inquiry faced down attempts to block the release of documents.

This came as the corporate regulator unveiled its latest enforcement update, noting it imposed $109.1m in fines and penalties and laid 125 charges against 18 people between January to June this year.

ASIC has faced a months-long inquiry in the Senate examining its effectiveness and spearheaded by Liberal Senator Andrew Bragg.

Senator Bragg said Australia had a “major problem with white collar crime”, and said Australia’s regulators were failing to enforce laws.

“In order to investigate ASIC’s approach to enforcement and ultimately prosecution, it is necessary to have access to files,” he said.

“What ASIC is trying to do is push this under the covers into the dark; they want to cover up the governance issues on the commission.”

But Senator Katy Gallagher, appearing on behalf of Treasurer Jim Chalmers, said ASIC was within its rights to refuse to release the documents to the Senate inquiry, saying they risked exposing the functioning of the regulator.

“As an independent regulator ASIC only shares confidential investigative information with the government in the very rare event when it is appropriate to do so,” she said.

Senator Gallagher said the inquiry should instead meet with ASIC in a closed hearing to hear responses to its questions.

Senator Andrew Bragg. Picture Kym Smith

Separately, in its enforcement update on Wednesday, the Australian Securities and Investments Commission said its activities in the half highlighted its efforts dealing with misconduct and non-compliant activities.

ASIC said it had commenced investigations into 70 matters between January and June, and at least 144 investigations were under way during the period.

ASIC secured 14 custodial sentences of which three people were jailed, while six received non-custodial sentences.

ASIC deputy chair Sarah Court said the regulator was focused on “promoting market integrity and addressing misconduct that places consumers and investors at risk”.

“Our commitment to insider trading and market manipulation deterrence continues and we expect further action for related misconduct in the coming months,” she said.

The regulator said that in the past quarter it had taken several steps to address predatory lending, high-cost credit, greenwashing, unfair contracts as well as securing action from insurers on past pricing failures.

ASIC said that between January and June this year it banned 19 people from operating companies after finding they were not fit to be directors.

The Federal Court made findings against four former and current directors of Endeavour Securities and Linchpin Capital Group, both of which are in liquidation, that they breached their duties as directors.

ASIC is seeking orders to impose fines and disqualifications on the four directors.

In May ASIC secured a $70,000 fine and two-year disqualification against former Australian Mines director Benjamin Bell after he was found to have breached continuous disclosure rules in two presentations he gave in Hong Kong and London.

Ms Court said continuous disclosures rules were “fundamental principles of fairness

and transparency that sit at the heart of Australia’s financial markets”.

“When directors fail in their obligations, they undermine these core principles and ASIC will look to take action,” she said.

Another 46 people were banned or suspended from providing financial advice or engaging in credit activities in the period.

ASIC’s enforcement tally was boosted by a $40m fine meted out against Insurance Australia Group, the insurer behind NRMA and CGU among others, which was found to have repeatedly failed to pass on proper pricing to its customers.

In the six months to June, ASIC for the first time used its powers to stop distribution of superannuation and insurance products over concerns the companies were failing to properly make target market determinations under design and distribution obligations.

ASIC moved to impose a temporary ban on Spaceship Super over concerns the fund was concentrating its investments in risky assets.

The regulator also intervened by pausing Humm’s buy now, pay later consumer lending product.

ASIC also waded into the pet insurance market, putting 38 interim stop orders against 67 products.