ASIC details Westpoint probe amid criticism

The Australian Securities and Investments Commission (ASIC) has reiterated its intention to scrutinise the role of financial advisers in Westpoint’s failed mezzanine property lending products after the Federal opposition levelled criticism at the regulator claiming it failed to act when warned about the Westpoint group back in mid 2002.

And in other breaking news, ASIC has confirmed that the man leading the investigation into Westpoint, deputy chairman Jeremy Cooper, has chosen to step aside from the process.

The situation arose as a result of indirect advice provided to Westpoint’s chief executive Norm Carey by Cooper when he was a partner with law firm Blake Dawson Waldron.

A Senate estimates committee was told yesterday ASIC had targeted up to 50 parties in its investigation into the operations of the Westpoint group.

“ASIC is now investigating the conduct of a number of officers and related entities in the group, the licensed and unlicensed advisers who promoted the Westpoint investment and professional advisers,” ASIC chairman Jeff Lucy said.

“The scope of ASIC’s inquiries and investigations will be extensive, covering close to 50 individuals and entities,” he added.

Labor’s criticism of the corporate regulator’s inactivity over Westpoint stems from warnings about the corporation provided by the Western Australian Department of Consumer and Employment back in 2002. ASIC admitted to the committee that it had not acted on this information because investors themselves had not lodged any complaints about losing money.

“Thousands of Australians invested hundreds of millions of dollars since initial warnings were given to ASIC in mid 2002. ASIC action against Westpoint in November 2005 has come far too late,” Federal Shadow Minister for Superannuation Nick Sherry said.

It is estimated over 3,000 investors stand to lose approximately $300 million in funds due to the collapse of Westpoint’s mezzanine funds.