ASIC hamstrung by inexperience and out-of-date regulations

ASIC government and regulation australian securities and investments commission director

20 November 2013
| By Staff |
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A former Australian Securities and Investments Commission (ASIC) executive has claimed the regulator has been tasked with prosecuting 21st century economic and corporate crime using 19th century legislative tools. 

In a submission to the Senate Standing Committee on Economics, Niall Coburn, a senior specialist adviser with ASIC’s enforcement directorate from 2009 to 2012, also stated the regulator is hampered by having limited skilled staff capable of handling complex cases. 

Coburn, who was also the former principal lawyer in ASIC’s enforcement directorate from 1993 to 2002, stated ASIC was able to tackle investigations of medium complexity but struggled with more complex matters due to limited skilled staff being “able to deliver on these major projects”. 

According to Coburn, experienced senior staffing levels at ASIC’s Enforcement Directorate have fallen to the point that there was only a handful of staff “who are capable of handling large complex investigations and who, most importantly, are able to deliver a prosecution result”. 

Coburn said many at senior management level were not engaged in operational activities, and few staff at the Commission or Senior Executive level had direct operational experience in prosecuting large investigations. 

As a result this has caused delays in prosecutions, particularly in cases stemming from corporate failures. Coburn’s comments echo those of the Community and Public Sector Union which stated that budget cuts had affected the regulator’s ability to attract, retain and train staff. 

In his submission Coburn claims delays are also caused by a duplication of resources between ASIC and the Commonwealth Director of Public Prosecutions (CDPP), and that ASIC should be given powers to investigate and lay charges in criminal matters. 

He also stated that regulatory procedures and national laws needed to change to consider the development of offshore companies, electronic transfers and the non-qualification requirements of directors. 

Coburn said that ASIC did not aggressively pursue defrauded funds off-shore but was not restricted in any way from tracing investor funds into other jurisdictions, nor was it unable to obtain civil court orders in offshore jurisdictions to prevent fund losses. 

Rather, he said ASIC needed more co-operation from the Australian Federal Police, the International Organisation of Securities Commissions and Interpol to find and return investor funds from offshore jurisdictions involving corporate or director fraud. 

Coburn also questioned ASIC’s use of enforceable undertakings, saying it appeared to use them as an 'expedient outcome’ instead of initiating legal prosecution due to the time, cost and difficulty in establishing that criminal offences have been committed.

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