'Between the Flags' campaign could leave ASIC open to prosecution

The Australian Securities and Investments Commission’s proposed consumer education campaign ‘Swimming between the flags’ could leave it open to prosecution, according to some commentators.

The campaign, which is tentatively scheduled for launch this year, classifies some financial products as “within the flags”, and therefore safer for consumers, and other riskier products as “outside the flags”.

Sydney business law specialist Leigh Adams said “unless statutory immunity applies, ASIC could end up being sued depending on how it phrases its commentary in terms of what products it includes and what it does not”.

Planner Ray Griffin, director of Capricorn Investment Partners, said it would be an “interesting case if a court of law were to deem the campaign as constituting a product recommendation”.

“It would be a matter for a court to decide if ASIC is guilty, but it would certainly raise the question if a consumer brought a case against it on the basis of having acted within its guidelines and lost out.”