Departing ASIC chief James Shipton concedes ‘difficulties’

Outgoing ASIC chair James Shipton says in an email to staff that the agency has had its difficulties but they can look forward with confidence.

ASIC chairman James Shipton has acknowledged the “difficulties” that the agency has faced during his tenure, but said staff could look forward with confidence.

In a memo to staff on Thursday, after Josh Frydenberg announced Joe Longo would be the next chairman, Mr Shipton sounded an optimistic note on the conduct regulator’s future.

“Despite the difficulties we have faced, I am very conscious that ASIC team members have continued to work diligently on the goals of our agency,” the email said. “I wish to again thank you for those efforts.”

ASIC deputy chair Karen Chester, who pitched for the top job, confirmed on Friday that she would be taking annual leave until June.

“I haven’t taken leave in 18 months and now seems to be a good time to do it,” Ms Chester told The Weekend Australian.

“I have another three years to serve on my contract. I plan to continue as deputy chair for my full term.”

Mr Shipton, a former Goldman Sachs banker, suffered a bruising three years as ASIC chairman, starting with an excoriating, 2018 review by the financial services royal commission of the regulator’s work.

Commissioner Ken Hayne criticised ASIC in his interim report for rarely going to court to “seek public denunciation of and punishment for misconduct”.

He urged the regulator to ask itself: “Why not litigate?”, which ASIC incorporated into its operating manual.

Worse was to come in last year’s expenses row, when Mr Shipton stepped aside pending the completion of an independent review of his claim for $118,557 in tax advice from KPMG.

The review found there was no wrongdoing and the chairman was reinstated until a successor was found.

The Treasurer’s announcement on Thursday that Mr Longo would take the job has triggered a transition period, with the former head of ASIC enforcement to take up the chairman’s job on June 1.

ACCC commissioner Sarah Court was appointed a deputy chair.

Mr Frydenberg said Ms Court and Mr Longo, who is currently a senior adviser at national law firm Herbert Smith Freehills, were both “highly qualified and experienced individuals with a deep understanding of both the private and public sectors”.

“Joseph Longo has the right mix of experience — he’s been a lawyer, he’s worked in banking and he’s worked in a regulator, namely ASIC itself, so he knows the organisation,” Mr Frydenberg said.

“He’s a level-headed, calm, considered professional, and we look forward to him leading that organisation at an important time because … it’s been a turbulent period.”

Mr Frydenberg flagged a new statement of expectations for ASIC, which would make it clear that the government expected the commission to operate as a strategic board and that all operational matters were the responsibility of the chair.

ASIC would also be required to support the economy’s recovery from the pandemic.

In his memo, Mr Shipton said he would be working with Mr Longo over the coming months “to manage a smooth transition”.

“With the appointment of Joe and Sarah, we can look forward with confidence,” he said.

“The renewed commission and all at ASIC can focus on our vital role in supporting the financial system and economy, and protecting consumers.”