ASIC canvasses looping all culprits into Shield/First Guardian compensation
The Australian Securities and Investments Commission (ASIC) has signalled its view that all participants in the investment eco-system which gave rise to the Shield and First Guardian collapses should financially contribute to remediating affected investors.
Giving evidence before Senate Estimates, ASIC deputy chair, Sarah Court reinforced the manner in which those involved in the eco-system including lead generators, financial advisers, ratings houses, auditors and super fund trustees had been doing a lot of finger-pointing with respect to blame.
Court referenced a “chain of different parties and the existence of “a complex chain of culpability”.
And in terms of making good the damage, the ASIC deputy chair said, “all players might have a role to play in our view”.
“There are a chain of different parties and individuals who have contributed to these collapses and they range from lead generators, financial advice firms, the people behind the funds that have failed, the superannuation trustees, the ratings agencies and, indeed the auditors,” Court said.
“There is a complex web of culpability in our view and it won’t surprise you that many of the players in the chain are pointing fingers at each other.
“There is the potential there that all of those players may have some financial role to play in compensating people,” the ASIC deputy chair said.
Both Court and ASIC chair, Joe Longo made clear to the Senate Economics Committee hearings that a significant element giving rise to the collapse of the two managed investment schemes (MISs) was the current “very permissive” regulatory structure.
As well, Longo lamented the fact that ASIC, as the regulator, had been “cast in the role of picking up the pieces” rather than preventing the harm.
Senators on the Economics Committee referenced the fact that the Government had relatively recently initiated a Treasury review of managed investment schemes and the recommendations ASIC had made to that review.
“Had those elements been put in place, could the Shield and First Guardian collapses have been avoided?” Tasmanian Green Senator, Nick McKim asked.
Longo agreed that the anti-hawking provisions may have been better applied with respect to lead generation activity.
There are two other key participants that contributed to this situation who should also be held accountable:
ASIC & APRA pointing fingers at everyone but themselves.
Hot Mess Jones, Jimmy Chalmers & rest of the ALP who buried the MIS review for last 2 years certainly ain’t pointing fingers at themselves.
Pay up Canberra Pollies & Bureaucrats your share of Compo for your share of these Failures.
Pollies & Bureaucrats Compo Scheme.
PBCS
Time they contribute from their own pockets $$$ to help compensate.
I wasn’t a player in the Shield fiasco. But I bet they will make me pay for the idiotic planners that were
That’s exactly what should be done rather than making innocent advisers foot the bill via CSLR(I.e. hence its name “of LAST resort’ not ‘scheme of First Choice’). The CSLR is not a convenient piggy bank to raid every time a criminal rips off their client.
Because you allowed these criminals to continue their cold calling after you were warned of their practices several times. Other advisers who were doing the right thing are not responsible for their misconduct, you are ASIC because you failed to act on the warnings which were openly given to you many many times.
By the way what are you doing about certain Industry Finds that are advertising CASH INCENTIVES (ie.Bonuses) to stay in their particular product rather than give the client an ethical choice of product????
Here’s your warning about this practice ASIC because this as you should be aware is an entirely unethical approach. CASH incentives to retain funds is clearly unethical as it entices clients to not look outside the product and stops them receiving full unbiased Financial Advice which is required when making such an important choice for their retirement future. Consider this a warning because this crosses your own ethical guidelines, and if you don’t shut down this practice then you are not doing your job and their will be consequences for these retirees.