ASIC backs private litigation
Class action cases being taken against financial planning groups are being hailed as “a good thing” by the Australian Securities and Investments Commission (ASIC) chair, Greg Medcraft.
Speaking at the Australian Institute of Company Directors lunch in Sydney today, Medcraft voiced his support for groups of investor pursuing companies through class actions rather than burdening the regulator with the cost of taking cases against businesses.
“In terms of our own resources, personally being a free enterprise person, I’d rather people deal with the issues between themselves than actually involve ASIC,” he said.
“That’s where I see class actions as a good development, because if the market decides there’s something they want to take on¨ rather than coming back to the public purse, to me it’s part of market efficiency.”
However, Medcraft said that while he supported class actions, he warned that ASIC was “very open to taking on direct action if need be”.
He stressed that ASIC’s support of private litigations was “not about [taking] a load off” the regulator.
“The strategy is that if the private sector is willing to take on, for example a compensatory action, then out job is to try and use the resources we have the most effectively we can,” Medcraft said.
“If in fact private litigation can achieve an outcome that we might have done previously then we should let the private litigation pursue that outcome, because we can use those resources to devote to another area.
“It’s just about being efficient frankly it’s not about lightening our load”.
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