ASIC's Systemic Failures: How Australia's Financial Regulator is Failing Consumers
Why Independent Economist John Adams believes ASIC should be abolished.
Melbourne, November 17, 2024 — At the Australian Citizens Party National Conference held in Melbourne on Sunday, independent economist John Adams delivered a scathing critique of the Australian Securities and Investments Commission (ASIC), presenting a compelling case for its abolition and replacement.
Adams, a former economics advisor to a Liberal Party senator, outlined five key reasons why he believes ASIC should be abolished: failure to investigate, distorted investigations, poor investigation quality, a “sick culture”, and alleged corruption within the organisation.
Drawing on ASIC's own data and reports, Adams highlighted a significant decline in the number of investigations conducted by the regulator over the past decade. He noted that by 2021-2022, ASIC was investigating less than 1% of complaints received, down from nearly 2% in 2014-2015.
Adams also criticised ASIC's focus on issues like “greenwashing” rather than pursuing serious fraud cases. He pointed to a dramatic drop in criminal referrals to the Commonwealth Director of Public Prosecutions under current ASIC Chair Joseph Longo compared to his predecessor.
The economist presented internal ASIC staff survey results showing extremely low morale and engagement scores, with only 2% of staff rating the organisation's quality positively. Adams argued this demonstrates a “sick culture” within ASIC that urgently needs addressing.
Perhaps most controversially, Adams alleged instances of corruption within ASIC, including attempts to manipulate parliamentary proceedings and cover up potential crimes. He recounted his own experiences investigating a bullion company, claiming ASIC failed to properly pursue clear evidence of wrongdoing.
The Australian Citizens Party has adopted a policy of abolishing ASIC and replacing it with two separate regulators, based on recommendations from the recent Senate inquiry chaired by Senator Andrew Bragg. Adams strongly endorsed this policy, arguing it aligns with international best practice.
The regulator has previously defended its performance and approach to enforcement, in various interviews and Senate committee hearings.
Watch the Speech Here:
Notable Quotes:
“ASIC is the financial police force. ASIC is there to keep the banks and the broader corporate sector, the financial system, honest so that we, the people, don't get screwed over.”
“The chances of you, a member of the public going into Collins street and saying, I want investigation, it's actually 0.35%. It is a fraction of a fraction chance that you can get an investigation.”
“These are not the numbers of a healthy regulator. What this demonstrates is that the performance of this organisation has declined.”
“This team of Joseph Longo and Sarah Court has been an absolute disaster. And these numbers have gone way down under this current leadership team.”
“I applaud Craig and the Citizens Party for taking this policy to the next election because the public service in the organisation is saying change has to happen and Longo and Court are so corrupt that they're being bullied and everyone's being demoralised.”
Speech FAQs:
Question: What is John Adams' background and expertise in this area?
Answer: John Adams is an independent economist and former economics advisor to a Liberal Party senator. He has conducted extensive research into ASIC's operations and performance, including analysis of their annual reports and internal documents obtained through Freedom of Information requests.
Question: How did John Adams obtain the information he presented about ASIC?
Answer: Adams used a combination of publicly available ASIC annual reports, documents obtained through Freedom of Information requests, parliamentary questions on notice, and information from whistle-blowers within ASIC to compile his evidence.
Question: Has ASIC or the government responded to John Adams' allegations?
Answer: ASIC has previously defended its performance and approach to enforcement in various forums, whilst not commenting directly on the claims Adams makes.
