ASIC intervention creates low doc test case
The Australian Securities and InvestmentsCommission (ASIC) has turned proceedings in the NSW Supreme Court into a test case with respect to the provision of low document loans.
The regulator announced on Friday that it had formally intervened in proceedings relating to the enforcement of low doc loans that concerned the conduct of the Streetwise Group of Companies, which had been subject to investigation by ASIC.
It said it had intervened pursuant to section 1330 of the Corporations Act in three proceedings commenced by Tonto Home Loans Australia Pty Ltd (now Firstmac Limited) and Permanent Trustee Company Ltd seeking to take possession of properties owned by former Streetwise borrowers.
In an announcement issued on Friday, ASIC said the cases provided “an appropriate vehicle to test the legal and regulatory framework that applies to enforcement action against borrowers by ‘low doc’ lenders where the conduct of an intermediary toward the borrowers is, or may be, in question".
ASIC said its intervention was based on public interest grounds to assist the court in relation to the construction and application of the Corporations Act and the ASIC Act.
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