ASIC calls for help in the face of criticism
By Zoe Fielding
The Australian Securities andInvestments Commission (ASIC) has sought assistance from investors and advisers whose clients face losses resulting from Westpoint’s failed schemes, just days after being the subject of criticism in the Federal Senate from a Liberal backbencher.
ASIC chairman Jeffrey Lucy wrote to each known investor in Westpoint that may have lost money, asking them to complete a confidential online questionnaire about their involvement with the company’s promissory notes, mezzanine finance, and details of their expected losses.
He also sent letters to advisers urging them to adhere to internal dispute resolution processes, provide genuine assistance to affected clients, and co-operate fully with external dispute resolution parties such as the Financial Industry Complaints Service (FICS).
The moves follow criticisms Liberal Senator John Watson last week levelled at the regulator about its approach to Westpoint.
Senator Watson questioned the length of time it took ASIC to act on concerns raised with it about Westpoint’s promissory notes.
He said Real Estate Consumer Association president Denise Brailey had raised concerns with ASIC about Westpoint’s promissory notes in 2001, but the regulator failed to take action and Westpoint was able to set up 11 additional projects over the following four years.
Senator Watson said the failures also highlighted gaps in current regulation.
“The Westpoint fiasco has shown that there are problems not only with the regulator detecting and acting on risky promotions, but with the law as it currently operates,” he said.
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