ASIC report card reveals revved up regulator

The latest report card from the corporate regulator says it has had a series of big wins in its bid to stamp out financial misconduct.

ASIC’s latest report details a series of big wins.

The corporate regulator’s six-month scorecard has revealed a string of big wins on the back of the post-Hayne royal commission “why not prosecute” directive.

The Australian Securities and Investments Commission report reveals more than $159.8m in civil penalties have been imposed by the courts after actions by the regulator between 1 July and 30 December last year.

Two record fines levied against two NAB subsidiaries and penalties imposed on over-the-counter derivatives provider AGM markets accounted for more than $132.5m in payments.

NAB was dragged before the Federal Court after two entities in its troubled wealth managed division NULIS Nominees and MLC Nominees were found to have made false and misleading representation to superannuation members about service fees.

The fees-for-no-service scandal exposed in the 2018 royal commission revealed a litany of examples of the practice across the financial landscape.

AGM Markets was slammed $75m in one of the largest civil penalties ever imposed on a financial services provider after investigations by ASIC.

AGM Markets representatives OT Markets and Ozfin Tech were found to have failed to properly supervise the conduct of authorised representatives and ordered to repay almost 10,000 former clients.

In July to December period ASIC charged 27 individuals in criminal proceedings, laying 194 criminal charges.

Five people were sentenced, including four imprisoned, while another 14 were handed non-custodial sentences.

The regulator commenced another 14 civil penalty cases in the July to December period, with 18 ASIC civil cases now before the courts.

ASIC has also banned 22 people from providing financial services or credit in the six month period, with another 28 people disqualified or removed from directing companies.

The latest enforcement update revealed the growth in court actions taken by ASIC in the wake of the explosive 2018 royal commission that called on the regulator to prosecute wrongdoers.

The report revealed an increase of 64 per cent in civil penalty proceedings and a 36 per cent increase in criminal proceedings launched by ASIC between the calendar years 2018 and 2020.

ASIC has pursued many case studies highlighted in the financial service royal commission, winning cases against 7 of the 45 case studies presented to the royal commission.

The regulator has 11 cases underway as well as a further 11 investigations underway. Disgraced financial planner Sam Henderson, who appeared before the royal commission, was sentenced in October last year after a in the wake of revelations he had misrepresented his qualifications for years.

Financial investigation and court outcomes have so far resulted in payouts of $77.65 for wrongdoing.

The regulator currently has 211 investigations underfoot, having commenced 107 investigations between July and December.

Five court proceedings were launched by ASIC in response to actions by business or others in relation to the COVID-19 pandemic.

ASIC also prevented two companies from relying on reduced disclosure rules introduced early in the pandemic, finding their actions were unjustified.