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BFCSA: ASIC Request for Evidence of "misconduct" by Lenders 20 Dec 2012

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Hi Readers and Members

Today I opened up yet another perplexing letter from ASIC requesting evidence of misconducts in relation to inappropriate lending.  We will place the entire content online in the next couple of days.

So why do we not send them our evidence?  We have collected thousands of documents?  Why not simply send them over in a brown paper bag?

The answer is simple:  This is not my job.  It's ASIC's job to investigate.  If we have 4000 internal emails ASIC will simply find a way to plug up the "leak."  It will not look at anything to alleviate the loss for investors.  It has done nothing for consumer protection during the past 14 years, so why would ASIC luminaries start now?  Another reason is well justified: We are the PEAK CONSUMER GRASS ROOTS GROUP and our BFCSA Members have sent in well in excess of 400 letters of complaint, only to have ASIC lie in Parliament as to the content.  Those files contain the proof of what they are seeking but ASIC are lazy.

ASIC want us to its work whilst its budget is a little different to ours.  ASIC enjoys a $400 million a year budget plus Treasury threw them an additional small bonus of $100 million.......we wish.

I gave evidence in Parliament: "not a clean document amongst the bundle of evidence."  ASIC then state: "we again reiterate our request for you to provide any specific evidence of misconduct to ASIC."

On 23rd December 2011, ASIC suggested it would "welcome any market intelligence."  It continued on: "on 29 May we requested you to provide evidence that falsification of documents took place in the banking sector...I again invite you to provide the evidence."

ASIC is suggesting it has no market intelligence to suggest.....well that's what ASIC told Parliament.  ASIC also told Parliament it has seen no systemic issues.....

ASIC then admits it was looking specifically for evidence post 1 July 2010. ASIC then lied to parliament and said the letters it received "contained no evidence."  It also lied and said they were mostly were with one broker (20 are out of 800 cases).   ASIC also lied saying most were complaints of around 2003 - 2005.  Very few are of that vintage and during a recent survey it proves what we all knew: most are 2008/2009 and some post July 2010.

It did admit that "the letters from Members contained allegations of misconduct but no evidence was attached."

ASIC simply doesn't get it!  One letter suggesting the bank was engaging in imprudent lending practices should be enough to start an investigation.  An avalanche of more than 400 complaints would surely ring warning bells.

ASIC has no intention of conducting a proper investigation as it didn't when alarm bells were ringing about Westpoint in the years 2000.  ASIC took no action until one year prior to collapse ( a test case that ran a year).   

ASIC travels at a snails pace and misses most of the clues that run alongside the track.  In 2005 it knew of 90 companies that people were investing their life savings into.  It knew that many were PONZI style structures.  I suggested the word PONZI to ASIC after studying the exploits of Charles Ponzi in 1999.  ASIC finally placed a Ponzi warning and a Promissory Note warnings on their ASIC website, in line with our forerunner RECA website in 2002.  Prior to these meetings with ASIC, no-one had heard the word PONZI.  Executives and Commissioners asked: who is he?

Meanwhile 90 companies set up as non bank lenders and the total could now be much higher.  

ASIC say: "we are concerned about systemic issues and serious misconduct either before or after 1 July 2010."  It then qualified the approach that: "the limited provisions prior to...."  Limited?  The NSW Supreme Court decision in Firstmac vs O'Donnell occurred way before 1 July 2010 and started in 2006.

Limited provisions?  Difficult to take action?  Rubbish.  This was known as the Streetwise case, yet ASIC's initial letter asking me to provide evidence was littered with similar excuses.   Investors lost around $50 million in that debacle.  ASIC responded it was not in the public's interest.  We then took it to the Media.....suddenly ASIC placed it's "public interest cap" on.  ASIC had the directors "under surveillance re another company structure in 1999.  We have the proof of course.......2 years prior to setting up Streetwise.  No thanks to ASIC the case ran all the way to the High Court and the decisions were based on the "old" legislative provisions to protect consumers.  ASIC had failed to act.

The next usual has many: "Whilst ASIC is committed to assessing all allegations of misconduct, it has finite resources...."  This is ASIC speak for "our $500 million this year means we can barely manage an investigation."

It is a lie to say they investigate/assess every case.  The 400 August 2012 complaints all received form letters back to say: "go away."

The next point: "ASIC considers a range of factors when deciding to take enforcement action......In some cases we decide it is more effective to deal with our 'concerns' using other regulatory tools, such as engagement with stakeholders, surveillance, guidance, education and policy advice, INSTEAD OF ENFORCEMENT ACTION."

This is ASIC speak for: "we need to educate you lot so that you do not lose any more money or throw yourselves into deeper debt....We only take action in the public interest."  Is this why it let Streetwise and Westpoint directors who were all known to ASIC continue with new companies?  Is this why Henry Kaye was permitted by ASIC to continue to set up 111 companies whilst under investigation?  Is that why ASIC arranged an Enforceable Undertaking (a parking fine..........slap on the wrist to promise he would not do the same things again...which he did)?

And this corker: "Consumers should obtain the own legal advice about the potential remedies available to them."  ASIC then sends them off to the EDR's or Legal Aid.

WHY WOULD ANY CONSUMER TRUST ASIC?  Our response is in the next BLOG.  Happy Holiday reading.

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  • doyla66
    doyla66 Saturday, 29 December 2012

    No consumer would ever trust ASIC. Yep, that's true. Why ever would we?
    We're not stupid now. We've learnt the very hard way doing the long, slow terrible wander down a fruitless & useless path that they & their drunken federal agency buddies send us on.

    They keep demanding you provide them with the evidence? Huh. ASIC, you dimwits have the resources to obtain it yourself but you do not have the nouse of how to go about it -- you would not recognise it even if it was staring right back at you from your own bloody desk!

    Heck, Denise has already stated very clearly that we know the exact & the only reason you want the evidence. All you want to do is plug the leaks, bury the evidence, protect your cronies & then pony up for the 'off the record' benefits to your own hip pockets.

  • doyla66
    doyla66 Sunday, 30 December 2012

    I have written to you a number of times requesting that you investigate this fraud and have offered to supply you with copies of this documentary evidence, but so far you have refused to accept any documentation and refused to investigate.

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