ASIC worried its informants will be identified

The Australian Securities and Investments Commission (ASIC) has claimed that a “third party” which provided the regulator with information relating to a possible enforcement action has expressed concern about that information being made public via a Parliamentary Committee.

The concern of the “third party” has been cited by ASIC as it seeks to persuade the Senate Economics Reference Committee to allow in-camera briefings of members of the committee rather than the wholesale production of documents.

In a letter to the chair of the Economics Committee, ASIC chair, Joe Longo denied any ASIC attempt at a cover-up but said that the material being sought included material provided to the regulator in confidence for the purpose of law enforcement and produced under compulsion through the exercise of ASIC’s investigating powers.

His letter said that ASIC wanted to assist the committee in a way which minimised harm to:

“those that interact and cooperate with ASIC’s investigations by providing information to ASIC on the expectation that such information is private and confidential (including reporters of misconduct and whistle-blowers). We note a third party has already raised strong concerns with ASIC about the production of material which they prepared and which they claim is subject to their legal professional privilege; and

“ASIC’s investigation and law enforcement processes.”

Longo’s letter cited amongst ASIC’s concerns about public disclosure the likelihood that the information would reveal confidential sources of information including self-reporters and whistle-blowers which was likely to discourage people from reporting matters to agencies in future.

“This may inhibit our ability to enforce the law, as ASIC would be unable to provide any guarantee that such material will not be published and that ASIC’s redactions will wholly mitigate the possible harms that could be inflicted onto third parties,” it said.

“In some cases it may be possible, for example, for reporters to be identified by the person of interest or those with knowledge of the matter from information contained in ASIC material, even where personal or identifying information is redacted.”

“The information would expose third parties including the aforementioned confidential informants, to unfair prejudice and damage to their personal reputation, privacy and other legitimate interests (including their right to seek to resist production on the basis of their legal professional privilege), and the risk of action.”

“Our files contain highly sensitive personal information about the subjects of our investigations, witnesses and other third parties, acquired by ASIC through the exercise of compulsory information gathering powers including search warrants. Our files also contain transcripts of private examinations under section 19 of the ASIC Act, where persons are required to answer questions without any right to silence. In respect of finalised investigations which have not resulted in enforcement action, our files necessarily contain untested allegations.”