A former financial journalist and Australian Securities and Investments Commission (ASIC) staffer has claimed that legitimate complaints about dodgy investments or advisers get buried in the ASIC archives.
The former ASIC staffer, Anne Lampe, has used a submission to the Senate committee reviewing ASIC's performance to make the damaging claim that the regulator only acted when complaints about particular schemes "reach tsunami level".
"Whilst working at ASIC's media unit it was apparent that ASIC received frequent complaints about dodgy and suspect investment schemes as well as lost investments in failed companies," her submission said. "These complaints were dutifully logged and filed. Their recording was methodical. The records were well kept. But that is where too many complaints remained — buried in the archives.
"It was only when the volume of complaints and losses about a particular scam reached tsunami level, or investors with losses contacted a member of parliament, or triggered a media inquiry, that ASIC seemed to spring into action.
"At one point it took a government minister's wife to lose a sum in a property fund to get ASIC to start an investigation into that fund," Lampe claimed. "When small investors lost money ASIC seemed incapable of action or didn't think it necessary. However, if a corporation or big fish reported a trading irregularity, backsides came off their seats quickly.
"While at ASIC I sat at meeting after meeting where the same investor-related concerns would come up for discussion without any sign of progress in the investigation, or action. The matter simply moved from one agenda to the next. The decision to do something seemed to be too difficult or perceived to be too risky. It seemed to me that those at the top who should have been making decisions to act thought it safer to avoid making a decision than to make one that might be later criticized in either a courtroom or in Canberra," her submission said.
