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New ASIC chair Joseph Longo warns about unregulated cryptocurrency trading and other economic threats to pandemic recovery

By abc.net.au , in News Australia , at July 29, 2021 Tags: , , ,


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Australian Securities and Investments chair Joe Longo says easing the economic crisis stemming from the pandemic is the immediate challenge for the corporate regulator.

In his first interview as ASIC boss, Mr Longo said the regulator was cracking down on investment scams running rife during the pandemic but the main priority was protecting Australia’s economy, which until recently was rebounding from recession.

“Frankly, it’s all hands on deck with COVID,” he told RN Breakfast.

“So, a big external priority for us is doing what we can to support Australian business and Australian consumers in the middle of this pandemic.

“That doesn’t mean we’ve taken our eye off the ball with corporate crime.

Mr Longo said the rise of cryptocurrencies and companies that promote them was “a significant area for concern”.

“It’s clearly the case that we’re seeing a number of scams emerging online with cryptocurrencies being traded on various platforms,” Mr Longo said.

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ASIC chair says pandemic is regulator’s biggest challenge; pledges to be tough corporate cop
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While not within ASIC’s jurisdiction, the former corporate lawyer who replaced ousted chair James Shipton earlier this year said widespread vaccination against COVID was critical to any recovery.

“There’s a consensus emerging that Australia needs to vaccinate as quickly as possible and at ASIC we are encouraging our staff to vaccinate,” Mr Longo said.

“I’m in the midst of being vaccinated myself. So I think vaccination is clearly an important part of where we’re heading with the economy.”

Insolvencies ‘at historic lows’ even as lockdowns smash revenues

Last year, at the height of the pandemic, former ASIC chair James Shipton expressed alarm about the impact of the crisis and openly worried there would not be enough liquidators and administrators to deal with a tsunami of corporate insolvencies.

But Mr Longo said the volume of corporate collapses had been surprisingly limited, despite damaging lockdowns in Melbourne and Sydney.

“So the Australian economy has been remarkably resilient. Whether that will continue in the coming months with a lock down in New South Wales is a great concern to everyone.”

‘We have teeth now and will continue to use them’

ASIC was criticised at the financial services royal commission in 2018 for being too soft on white collar criminals and more inclined to do deals such as enforceable undertakings rather taking criminal action in court.

Years before the commission, then-ASIC chair Greg Medcraft once said Australia was a “paradise” for white collar crime, before quickly backtracking on that comment.

Mr Longo told the ABC he would be a “tough cop on the beat” and not friendly to business.

“It’s true that, coming out of the royal commission, enforceable undertakings got a bad rap,” he said.

“ASIC has always been an active litigator. Even as we speak, we’re in court somewhere in the country every day of the week.

“I’m absolutely committed to ASIC remaining an active, credible law enforcement agency. No one should be under any doubt that we will not continue to litigate.

“We have teeth now and we will continue to use them.”

ASIC avoids comment on AMP, Nuix scandals

Mr Longo refused to comment on ASIC’s decision to drop its criminal pursuit of wealth manager AMP after its “fees for no service” scandal exploded in the royal commission.

“I’m not going to comment further on the AMP case,” Mr Longo said.

“What I would say, though, is that in running criminal proceedings it’s our job to investigate and we refer briefs to the DPP (director of public prosecutions) and then it’s up to the DPP to decide which charges are actually laid.”

Mr Longo was also reluctant to comment on investigations into analytics company Nuix, which recently listed on the ASX, amid allegations about insider trading and problems with statements in its prospectus.

But he defended ASIC in the face of criticism that issues with the Nuix prospectus should have been detected before the company’s float late last year.

“I’m satisfied that we followed our usual processes and policies and procedures,” Mr Longo said.

“We do not have a pre-vetting system in Australia. Prospectuses are lodged and ASIC does not warrant the truthfulness or accuracy of everything in the prospectus. That is the responsibility of directors and their advisors.”

Mr Longo also refused to comment on whether the regulator was investigating the Crown Resort casino empire, given evidence of anti-money laundering breaches that are jeopardising the company’s licences to operate in Sydney, Melbourne and Perth.

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