ASIC’s decision on ANZ ‘months away’ but it needs more funding to carry out investigations

Corporate regulator ASIC says any decision about its investigation into ANZ is still months away, and says it needs more funding to run costly criminal investigations and prosecutions.

Committee member senator Deborah O’Neill, acting secretary John Bell and Alex Hawke during questioning of ASIC. Picture: Jane Dempster

The corporate regulator says any decision about its investigation into ANZ is still months away, and says it needs more funding to run costly criminal investigations and prosecutions.

Appearing before the Parliamentary Joint Committee on Corporations and Financial Services, Australian Securities & Investments Commission chair Joe Longo said a series of tough prosecutions was chewing through valuable resources within the agency.

Mr Longo said the regulator was reviewing its ongoing investigation of ANZ, in which investigators were examining the bank’s role in a $14bn government bond placement last year and data provided to a separate government agency.

ASIC began its investigation in February but Mr Longo told the parliamentary committee that the regulator expanded its probe in August, looking at “suspected contraventions relating to errors in ANZ’s reporting of secondary bond market turnover data” to the Australian Office of Financial Management.

ASIC asked the AOFM in ­August to hand over documents to bolster its probe. ANZ overstated its turnover by more than $50bn.

Mr Longo said ASIC expected to “form an internal view” about the status of its ANZ probe by “the first quarter of 2025” and whether “any enforcement action should be taken” in regards to the suspected contraventions. He said the regulator was giving the ANZ investigation “the highest priority given the seriousness of the ­alleged misconduct and the ­potential for the alleged conduct to impact the interest payments of the commonwealth on the bonds issued and therefore Australian taxpayers”.

Mr Longo said ASIC was pursuing large corporations: it had ­already fined ANZ $15m for misleading customers about its credit cards, and secured a fine against the bank over its failure to reveal a $790m shortfall in a $4.5bn sharemarket raise.

“ASIC has more enforcement action due over the coming months targeting behaviour that has been detrimental to customers and the market,” he said.

ASIC’s Tim Mullaly, Joe Longo, Simone Constant, Alan Kirkland and Kate O’Rouke. Picture: Jane Dempster

ASIC recently charged the Australian Securities Exchange over its failure to reveal that a $250m technology program to replace its ageing CHESS clearing and settlement scheme had failed.

“ASIC will not hesitate to take further regulatory action, including the use of our new powers under both the FMI reforms legislation and competition in clearing and settlement legislation, to hold ASX accountable,” Mr Longo said.

ASIC deputy chair Sarah Court said the regulator’s ballooning enforcement list meant resources for potential criminal action was being locked up in long-running cases.

She said ASIC had to acknowledge there had been a decline in criminal prosecutions brought by the regulator in the past year, and that the agency was internally ­reviewing its low number of briefs sent to the federal Department of Public Prosecutions.

“We are very committed to ­increasing those numbers back to our normal operating normal ­operating amounts,” she said.

Ms Court said the 84 criminal cases ASIC had before the court were “very complicated, hard-fought matters”, and that each one took away resources within the regulator from other cases.  “I think the nature of the matters we are investigating is becoming increasingly more complex and more sophisticated,” she said.

Mr Longo pointed to the ongoing litigation against mining baron Clive Palmer as an example of the heavy load.

But Labor senator Deb O’Neill said she was concerned there was a “huge expenditure of the public purse” on court action given the involvement of accountants in often assisting law-breakers.

“I doubt any of the individuals ultimately responsible for the mess in the courts cooked this all up by themselves, created the loans by themselves, used a textbook about economics and had no accountants involved,” she said.