Regulatory Reform

The Financial Regulator – ASIC and the Prudential Regulator APRA are classic examples of “Regulatory Capture” where the “Regulators” seek to further the interests of the industry they regulate instead of protecting members of the public who pay for their salaries.

More information on “Regulatory Capture” can be found here.

The “Regulators” are part of the executive arm of government and they are not established under Chapter III of the Australian Constitution as are the independent Courts. The heads of these agencies are political appointees.

“Regulators” are under no legal obligation to enforce the legislation that they are tasked to “administer” and so the result it the “cherry picking” of complaints that are investigated so that the “clients” of the Regulators, ie the major financial institutions, are only subject to any investigation if public pressure is applied. The “standard operating procedure” of the Regulators is based on the premise that it is far easier to provide protection for a small number of white-collar criminals that it is to seek justice for their many victims.

Common tactics used by the “Regulators” are:

  • (i) Ignore complaints and complaints (whistleblowers);
  • (ii) Claim there is no evidence without making any attempt to obtain relevant evidence;
  • (iii) Misrepresent the law to complainants;
  • (iv) Misrepresent the law to Members of Parliament and Senators;
  • (v) Rewrite the law so as to protect the interests of their clients; and
  • (v) Simply fail to collect and provide evidence to the Commonwealth Director of Public Prosecutions.
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    There are four major areas of urgent need of reform. One is in relation to the compulsory superannuation system. The second is the investment advisory or “financial planner” system. The third is in relation to the insolvency industry which as close ties to both the major banks and to ASIC. The fourth is how Whistleblowers are treated when they attempt to reveal fraud and misconduct in the financial services industry.

    As the Wallis Committee noted:

    “Compulsory contributions and tax assistance for superannuation … arguably combine to imply that government should provide greater regulatory assurance in relation to superannuation than would normally apply for market linked investments.” {Wallis, above at n 41, 193.}

    Who makes the Law?

    The majority of Australians might assume that the people they elect to the Parliament make the law and that these representatives are accountable to those who elect them. However those we have elected have handed over this power to unelected and unaccountable public servants who seek to exploit this power for their own benefit and for the benefit of their clients – the major banks and other major financial institutions.

    If the “Rule of Law” is to prevail then the Parliament must restore its own sovereignty over the making of our laws and not hand this basic democratic right to those who never have to face an election, on the basis that MPs and Senators are not willing to consider a vote on “complex” commercial matters that arise on a regular basis.

    Recommended Reforms – Superannuation System

    The following submission was made to The Treasury in relation to a current Bill before the Parliament that will give more powers to APRA to the detriment of 12 Million adult Australians who are forced to be members of superannuation Funds.

    Superannuation Governance

    Recommended Reforms – “Financial Planners”

    There have been ongoing scandals involving the “Financial Planner” industry and recommendation made by the Senate Economics Reference Committee have failed to reform the industry. APRA had simply refused to lay any criminal charges against any senior bank manager who was engaged in fraudulent conduct so as to cover up the extent of misconduct by financial planners who are employed by the major banks. The misconduct and conflicts of interests will continue to plague this industry until there are fundamental reforms at ASIC

    The Treatment of Whistleblowers

    More information on the whistleblowers involved in this case can be found here.


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    This tab updated on 13 August 2015