Banking royal commission a wake up call for the corporate watchdog

Terry McMaster, the head of financial advice group Dover, leaves the Federal Court with the aid of paramedics after collapsing while being cross examined during the banking royal commission yesterday afternoon.(AAP Image/Stefan Postles)

Seconds after ghostly financial adviser Terry McMaster took “Shock and Orr” to its logical conclusion, ASIC completed its caterpillar-to-butterfly transition from corporate cop to corporate nurse.

Treasurer Scott Morrison’s favoured description of ASIC as a “tough cop on the beat” looks increasingly ridiculous.

This morning ASIC’s wannabe cop in charge of keeping an eye on financial advisers Louise Macaulay told Kenneth Hayne’s Royal Commission it had not pursued a single civil case for breach of the “best interests” duty over the last five years.

That is not a good statistic after the past fortnight of revelations about the misconduct, dishonesty and forgery rife within Australia’s wealth industry.

ASIC, not surprisingly considering its record, has been accused of being too close to the industry it is supposed to regulate.

This week Margin Call reminded readers that AMP’s on-leave in-house counsel Brian Salter was the best man at former ASIC boss Greg Medcraft’s wedding, while financial doyen Ian Harper suggested ASIC had “Stockholm syndrome” and former ASIC senior investigator Niall Coburn said the regulator’s staff “haven’t got the balls” to prosecute.

Louise Macauley of ASIC leaves the Federal Court in Melbourne earlier today. (AAP/Andy Brownbill)

Then on Thursday afternoon — in either a beautiful example of shared humanity or a fitting metaphor for the relationship between the regulator and its industry — after McMaster was literally struck down under questioning by counsel assisting Mark Costello, who sprung to the Dover Group boss’s aid?

ASIC’s Macaulay, who launched across the room to be by McMaster’s side after he collapsed in his chair.

Kenneth Hayne

Key players

Commissioner. A former High Court judge, married to current High Court judge Michelle Gordon. During the hearings he has been tough on banks slow to cough up information required by the commission and dropped hints he is concerned about whether they have a willingness to comply with the law of the land.

Rowena Orr

Key players

Senior counsel assisting the commission. A Melbourne QC with razor-sharp cross examination skills and a background focusing on the intersection between the criminal and commercial worlds.

Philip Crutchfield

Key players

Melbourne QC representing AMP. The wealth manager is in the commission’s sights in this round of hearings, which focus on the scandal-prone financial planning sector.

Matt Collins

Key players

Melbourne QC - and president of the Victorian Bar - representing ANZ. Best known for his defamation work, including representing actress Rebel Wilson in her multi-million-dollar win over Bauer Media.

Charles Scerri

Key players

CBA’s counsel is a Melbourne QC who specialises in representing the big end of town and government agencies. The bank’s well-known track record of scandal in its financial planning business is set to get another airing at the commission.

Neil Young

Key players

NAB’s long-time go-to QC is not to be confused with the Canadian singer-songwriter of the same name - but is very much a rock star at the commercial bar.

The corporate cop-turned-nurse went on to administer first aid to the 56-year-old financial adviser, who was removed from the federal court on a stretcher before leaving Melbourne’s Phillip Street in an ambulance.

Costello won’t get another chance to probe the convalescing McMaster, who has been excused from giving further evidence in the Hayne Show.

This morning, Macaulay followed McMaster into the witness box to admit to counsel assisting Rowena “Shock and” Orr that ASIC’s record of regulating Australia’s rogue wealth industry was “not satisfactory”.

That’s a polite way of putting it.

Meantime in Sydney, ASIC’s chief nurse James Shipton was fraternising with the local wealth industry at an event conducted by the Sally Loane-led Financial Services Council.

Two members of Loane’s Geoff Lloyd-chaired FSC board — AMP advice executive Jack Regan and Commonwealth private banking boss Marianne Perkovic — were grilled during the wealth industry’s shameful past fortnight in the Royal Commission.

Shipton has a big decision to make after Orr’s address today to commissioner Hayne stating that Catherine Brenner’s AMP had committed criminal offences by misleading ASIC.

Will Shipton’s ASIC finally metamorphose into a corporate cop and press charges?

Or will his ASIC continue to take the assistant role in its ongoing game of “Doctor and Nurses” with corporate Australia?