Australian Securities and Investments Commission (ASIC) employees were averse to pursuing prosecutions through the courts because they were keen to avoid the embarrassment of losing, according to financial services barrister and former Superannuation Complaints Tribunal member, Noel Davis.
In a column to be published in Money Management, Davis has noted the impact of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and the fact that such attitudes within the regulator appear to be changing.
“Perhaps, consequently, financial institutions and trustees will treat the regulators more seriously than they have in the past,” he said.
However, Davis said that when ASIC took over the regulation of superannuation from the former Insurance and Superannuation Commission, this had not been the case.
“A long time ago, when ASIC took over the regulation of superannuation from the former Insurance and Superannuation Commission, I did some training sessions for ASIC employees on regulating superannuation funds,” he said. “When I and my colleagues discussed the circumstances in which ASIC would litigate or prosecute, the reaction of the ASIC officers was that litigation was to be avoided to avoid the embarrassment that would go with losing some cases.”
“Finally, that appears to be changing,” Davis said.