ASIC jettisons three banking royal commission referrals

ASIC has dumped three Hayne royal commission referrals after the probes failed to reach a prosecution standard.

ASIC chairman James Shipton. Picture: Kym Smith

The corporate watchdog has dumped three royal commission referrals made by former High Court Justice Kenneth Hayne “with no further action being taken”, after the probes failed to reach the standard where it could prosecute alleged law-breaking.

In its latest update following the royal commission, the Australian Securities & Investments Commission said of the 13 referrals made by the year-long banking misconduct inquiry, one case was now being considered by the Commonwealth Director of Public Prosecutions for potential criminal action, assumed to be AMP.

Seven referrals remain under investigation by ASIC’s ­office of enforcement, while two cases are already in court: one against National Australia Bank’s superannuation arm, NULIS, over the fees for no service scandal, and one against life insurance giant TAL over misleading conduct, after it cancelled a cancer patient’s policy by claiming she had an unrelated “history of depression” that was not disclosed.

Wealth manager IOOF told investors last week ASIC was not taking any action on a referral made to the regulator from the Hayne royal commission. IOOF does, though, remain subject to ­licence conditions imposed on it by the banking regulator and has another round of milestones to meet by June 30.

According to its enforcement update, at the start of January ASIC under chairman James Shipton had 316 investigations “on foot” covering a range of misconduct across its jurisdictions.

The regulator said it was prioritising investigations into misconduct in superannuation and insur­ance, instances where it could deploy its new tougher powers, ­illegal phoenix activity, auditor misconduct, and online mischief. It said it was targeting “persistent underperformance” as a key indicator for potential enforcement activities in the $3 trillion superannuation sector, meaning laggard funds were in ASIC’s crosshairs.

By the end of the year, ASIC expects it will have dealt with the 13 referrals from the royal commission and issues arising from its 32 case studies. ASIC said over the past 12 months there had been a 52 per cent rise in enforcement investigations invol­ving CBA, NAB, Westpac, ANZ and AMP.

But the regulator is also targeting the relatively smaller end of town and this month launched a case against former Bellamy’s Australia director Jan Cameron.

Ms Cameron, the multi-millionaire founder of outdoor adventure wear group Kathmandu, faces five years’ imprisonment for allegedly failing to lodge a substantial shareholder notice in Bellamy’s in August 2014.

Also, in February 2017, she allegedly lodged a misleading substantial shareholder notice by failing to disclose the relationship she had with the company, Black Prince, which held 14 million Bellamy’s shares and was based in the Caribbean island of Curacao.

Mr Hayne had criticised ASIC for a “deeply entrenched culture of negotiating outcomes, rather than insisting upon public denunciation of, and punishment for, wrongdoing” and urged the regulator to ask itself the question: “Why not litigate?”

“While ASIC has made significant progress in responding to referrals and case studies from the royal commission, our increased enforcement activity is not limited to royal commission-related matters,” ASIC said.

“We will continue to put other cases of misconduct before the court, applying our ‘Why not litigate?’ approach to effectively deter similar, new or emerging forms of misconduct across the ­financial services sector.”