ASIC refuses to reveal its methods

2 September 2019

The Australian Securities and Investments Commission (ASIC) has denied key elements of a freedom of information (FOI) request because it fears it might give away too much about its processes and methodology to high risk hedge fund managers who are still under scrutiny.

The regulator has told the Victims of Financial Fraud (VOFF) group that it cannot release documents pertaining to particular hedge funds because it contains details of ASIC’s methods and procedures in conducting monitoring and risk-based surveillance of hedge funds.

The VOFF, which is focused on gaining recompense for Self Managed Superannuation Fund investors hurt as a result of the Trio Astarra collapse, had asked ASIC for a document that lists hedge funds that ASIC considers to be of high risk between 11 December, 2008 and 19 September, 2009.

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“Disclosure of this information would reveal the specific criteria that ASIC uses to assess indicators of potential fraud and higher risk in the hedge fund sector. It would therefore reveal what factors guide and influence the allocation of investigative resources by ASIC,” the letter said. “Disclosure of the criteria, along with ASIC’s notes and considerations, would prejudice the effectiveness of these methods and procedures by providing forewarning of the matters considered by ASIC in deciding whether to conduct further risk analysis and investigation.”

“If hedge fund managers were aware of the indicia that guide ASIC’s decision making they would tailor their activities in ways that specifically exclude these criteria with a view to avoiding detection,” the letter said.

“If persons are able to tailor their activities based on knowledge of the types of matters ASIC takes into account when assessing what types of conduct it will and won’t pursue, ASIC’s ability to enforce the law will be adversely affected. There is a very real risk of prejudice to the effectiveness of these procedures in that an examination of this material would allow a person to exploit any weaknesses in order to evade detection.”



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If this is anything like report 413 into life insurance which led to the LIF it goes something like this:
1. ASIC target only 200 files of known churners.
2. FSC members use this as an excuse to rip off advisers with lower commissions.
3. Advisers point out that high lapses are only relevant to a tiny number of advisers. Ask ASIC to release their targeting methods under FOI. ASIC refuse.
4. LIF is passed.
5. ASIC request lapse data from the same FSC members.
6. ASIC admit that churn is only relevant to as few as 50 advisers out of 20,000 plus.
7. Honest advisers screwed again. FSC members laughing all the way to the bank.
8. FSC members start increasing existing customers premiums and try to encourage churn by reducing premiums for new business only for the same products.
9. Customers screwed.

Has anyone seen any ASIC action from this intelligence gathering in 2008?

ASIC, " NO we don't use Google search, to do our monitoring..."

Don't hold your breath on anything fair, reasonable or in anyone's best interests to ever come out or ASIC. The ultimate irony, the enforcer has no intention to ever uphold the same standards it enforces on others.

Clearly they're legalistic nerds who wanna be big shots, and so subscribe to utter BS ethos from bad b grade Hollywood movies & TV shows like little geek fans, that goes something like 'sometimes good people have to do bad things' or 'we are the law, we don't have to adhere anything we don't want to' .

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