This tough corporate cop has seen it all, but even she is astounded by the scale of business misconduct

Sarah Court has seen the worst of corporate Australia. She was there when Telstra was fined a whopping $50 million for its treatment of Indigenous customers in rural Australia; again when Apple was fined $9 million for misleading consumers about its free repairs; and, like the rest of us, watched aghast during the banking royal commission.

But even she remains staggered by the continuing vast, illegal and deceitful transfer of wealth from ordinary Australians to big businesses.

After interviewing Court, the highly regarded deputy chair of the Australian Securities and Investments Commission, multiple times over the past year about a range of corporate misconduct issues, including significant legal victories she has chalked up, we are meeting in person for the first time on a scorching 33-degree day at Il Solito Posto, an Italian basement restaurant near 101 Collins Street, and right across the road from ASIC’s Melbourne offices.

It’s a favourite Melbourne haunt for the top end of town – and perhaps the perfect backdrop to our lengthy musings on the rise of populism, the decline of trust in institutions and our collective responsibilities as a society to address widening social inequality.

It has taken more than six months – and lots of predictable bureaucratic wrangling – to finally set up this lunch.

Sarah Court and Joe Longo, who joined ASIC to clean up the corporate regulator after it was lampooned during the banking royal commission, at Senate estimates in February. Credit: Alex Ellinghausen

ASIC is not the golden regulator child – that title ostentatiously goes to the Australian Competition and Consumer Commission, where Court used to be commissioner – and for a very long time, it was a maligned, ne’er do-well body famously lampooned by eminent jurist Kenneth Hayne during the banking royal commission. Court, and her boss, Joe Longo, were appointed in 2021, tasked with cleaning up the corporate regulator whose competency and efficiency are a perennial issue.

ASIC still faces a barrage of criticism, including by parliamentarians who as recently as six months ago recommended splitting ASIC into two after a two-year inquiry concluded it “comprehensively” failed its role as a regulator.

The inquiry’s chair, Liberal senator Andrew Bragg, accused ASIC of enabling Australia to become a “haven for white-collar crime” because of its timid legal approach.

Other independent observers question why the regulator goes hard on super funds over greenwashing, but allows resources companies to make seemingly misleading statements without any serious ramifications. Or why criminal prosecutions for corporate misconduct are so few and far in between.

Court is convinced ASIC has turned a corner. In 2024, it convinced several Federal Court judges Mercer, Vanguard and Active Super misled investors as part of landmark greenwashing cases; sued failed airline Rex and embattled super fund Cbus; and pursued big banks and insurers for failing vulnerable customers.

“There are absolutely areas we are working on, one of them is about how we engage with people who report misconduct,” Court says. “I won’t say it’s completely fixed, but we’re making inroads.

“I’m much more comfortable than perhaps ASIC has been in the past about sharing information on those who bring matters to us; being more open and trusting.”

The insalata di barbabietola. Credit: Penny Stephens

Over the course of 1½ hours (neither of us realise how quickly that time has flown), we find ourselves regularly going back to that theme of accountability and transparency, and how those two fundamental pillars of democracy are critical to breeding community trust.

When Court and I nestle into a corner table on the lower ground of the cosy Il Solito Posto, we both immediately gravitate towards insalata di barbabietola (to be frank, I had already diligently pored over the menu before I arrived) – a beetroot and sweet potato salad with shaved apple, hazelnuts, spinach and goat cheese. For variety, Court instead opts for the caprese salad with tomatoes, capers and buffalo mozzarella, while both of us indulge in sparkling water.

I’ve already spoken with an ASIC media adviser (twice) about payment for today’s lunch. Usually, this masthead pays. But there’s concern over whether that would be considered a gift under the Australian Public Service guidelines, if it needs to be disclosed or can’t be accepted in the first place.

The caprese salad. Credit: Penny Stephens

We never get to the bottom of what is explicitly allowed and what is not, if there’s a chance Court or I could fall foul of some law, so the deputy chair and I end up splitting the bill, lest she is grilled in Senate estimates over it.

We are already deep into conversation about the impacts the Hayne royal commission has had on corporate Australia and the regulators when our food arrives. Court is no stranger to this world where big business intersects with government – she was a former executive lawyer with the Australian Government Solicitor and most recently a commissioner at the ACCC who oversaw their litigation program, but even she is astounded by what she has seen over the past three years in her role at ASIC.

She is quick to point out that she doesn’t believe most people are out to do the wrong thing but somewhere along the way, the systems and processes designed to safeguard consumers fails. But, perhaps dishearteningly, the issues that were identified and promised would be fixed during the banking royal commission still endure.

Over an almost two hour-lunch, Sarah Court regularly goes back to the theme of accountability and transparency. Credit: Penny Stephens

“The vast amounts of money in the financial services sector that needs to be remediated has generally staggered me,” Court says.

“In the insurance area alone, there was more than $800 million needing to be remediated … It’s just really staggering that promises can be made – and it’s not just one company or sector – but not delivered on. Sums of money that might be trivial or small amounts for the individuals, but as a collective transfer of wealth from consumers to those entities is quite amazing.”

This is what Court sees as the crux of the issue: has a business promised to deliver something but failed to do so? This is why, she says, ASIC is going hard after greenwashing.

We decide to take a break. I’ve eaten through a chunk of my salad, but Court has barely touched hers. While we both eat, she talks about her upbringing in Adelaide, how she landed her dream cadetship – working in criminal law policy in Canberra before deciding she hated it and moving across to the Australian Government Solicitor – and her childhood friends who still ground her.

I have just finished reading New York Times journalist Ezra Klein’s 2020 book, Why we’re polarised, and still reflecting on the results of the United States election, so I want to understand what role Court thinks she has in rebuilding trust in institutions, or the impacts she has seen of rising populism on her own institution.

Throughout our conversation, Court points out several times she doesn’t even want to characterise it as a “rise in populism”. That just sounds dismissive of people’s genuine concerns, she says, and those who are in positions like hers have a responsibility to get out of their comfort zones and engage with the issues people identify as a challenge.

“You’ve mentioned this idea several times. Is there anything in your life that has shaped you and these thoughts?” I ask.

Court considers this.

“Hmmm. Two things. I live in Adelaide and spend most of my time in Adelaide. Most of my friends are from high school. They are completely oblivious to what I do. They are very special to me, but they are not people immersed in the big picture [politics], who are just living and getting by and a bit oblivious to politics and regulators, and that’s quite humbling in a way,” she says.

“Then, the work at the ACCC is very consumer-focused and certainly engaging with consumers … All the commissioners around the table have wide-ranging consumer experience, running consumer helplines, eloquently explaining what they are seeing, that their clients are desperate. That’s also been humbling.”

It’s this lens that she says she has brought to ASIC: the regulator’s role is to hold business to account, identify the harm done to the consumer and demonstrate to the public the corporate watchdog is the tough cop on the beat.

Whether it has successfully demonstrated that is up for debate, but Court says ASIC has “fundamentally” changed its approach since the banking royal commission, noting it will always be difficult to investigate every single complaint made.

The regulator launched 168 formal investigations in 2023-24, according to its most recent annual report, and 32 civil proceedings in court against 69 defendants, leading to $90 million in penalties. ASIC prosecuted 186 people for strict liability offences, while the Commonwealth Director of Public Prosecutions prosecuted 23 people following the regulator’s referral. Those figures are higher than what the regulator achieved in 2017-18, but not as high as three years ago in the immediate aftermath of the royal commission.

“[Holding particularly the big end of town to account] sends a message to institutions we’re serious, it sends a message to the industry more broadly ASIC cares about greenwashing or hardship,” Court says. “So it’s about making sure business is accountable, but you’re right, if consumers see regulators taking these actions, it rebuilds trust that there is someone looking after their interest.”

I wanted to hear from someone who worked with Court, so I called Graeme Samuel, the former chair of the ACCC. He was full of praise for the woman he had hoped would succeed him to lead the competition regulator.

As a litigator, Samuel says, Court “exhibited remarkable common sense, practicality, and a pragmatic attitude ... to achieving the best regulatory result”.

“There were some structural changes needed in ASIC – both organisationally but also culturally, and Joe [Longo] has brought those about together with Sarah,” Samuel says. “I understand the criticism that was levelled … but I think the critics are waning and will soon turn around.”

ASIC’s landmark greenwashing case against Mercer culminated in an $11.3 million penalty in August, after the Federal Court ruled the super fund’s Sustainable Plus option had investments in 15 companies involved in fossil fuels, 15 companies involved in alcohol production and 19 companies involved in gambling.

A month later, the Federal Court fined Vanguard a record $12.9 million for greenwashing. The court will soon hand down a penalty after finding Active Super misled consumers about its environmental and social credentials.

Court, who is leading ASIC’s push against greenwashing, says the regulator’s legal victories should send a warning bell to Australian corporates. If you’re making promises just to boost your bottom line, but aren’t confident you can keep them, don’t make them in the first place, Court contends.

“People are very clear, and increasingly so, they want to have some control over where their money goes,” she says.

“Then of course the response of investment firms is they see that demand and say, ‘excellent, we’re going to offer you these things’ … and lo and behold, there’s a preponderance of these available. That’s absolutely fine. You go your heart out about having these kinds of funds, but you have to be absolutely confident you’re delivering on that promise.”

Court has spent her entire life in circles where public scrutiny has been paramount. She is now vowing to turn that blowtorch on corporate Australia.

We have split the bill after being unable to work out whether the lunch interview is considered a gift or not.Credit: Sumeyya Ilanbey

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