ASIC chair highlights surge in enforcement actions

ASIC chair highlights surge in enforcement actions | Insurance Business Australia

Insurance News

Digital transformation efforts also outlined

Insurance News

By
Roxanne Libatique

Australian Securities & Investments Commission (ASIC) chair Joe Longo recently addressed the Parliamentary Joint Committee on Corporations and Financial Services, detailing the commission’s recent activities and strategic direction.

Longo (pictured) was joined by deputy chair Sarah Court and commissioners Kate O’Rourke, Alan Kirkland, and Simone Constant, among other key ASIC executives.

Over the past 12 months ending April 30, the corporate watchdog initiated more than 130 new investigations, a 25% increase from the prior year. Additionally, 29 new civil proceedings were filed in the Federal Court against 64 defendants, reflecting an 11% rise.

The investigations have led to 23 individuals being charged with criminal offences, resulting in 16 convictions and fines totalling $936,000.

Longo emphasised ASIC’s role as a leading law enforcement agency in Australia, frequently engaging in court actions to address serious misconduct.

“As members will be aware, court action can be costly, resource-intensive, and it can be complex. No two cases are the same,” he said. “We pursue court-based outcomes and substantial penalties when we find evidence of serious misconduct and it is in the public interest to do so.

“Our enforcement outcomes are strong – our record shows that ASIC is securing materially higher penalties than it did a decade ago. We also pursue difficult cases where the outcome is not guaranteed, but we consider it important to test the law.”

ASIC’s technological investments

Longo also outlined ASIC’s digital transformation efforts, which are critical to enhancing enforcement and compliance.

The Financial Regulator Assessment Authority recommended substantial improvements in ASIC’s data and technology capabilities. In response, the corporate watchdog has developed a digital target state and secured initial funding to enhance cybersecurity across its regulatory systems.

Longo stressed the necessity of technology in handling the rapidly evolving financial services landscape.

“ASIC is in a digital arms race, with AI rapidly being adopted in financial services firms and digitally-enabled misconduct is on the rise,” he said. “We need to be a leading digitally enabled and data-informed regulator who is ahead of the game.”

In 2023, ASIC reviewed 2.6 million documents as part of its investigations. Enhancing data and analytics capabilities would streamline this process, reducing reliance on manual efforts and accelerating investigations. Longo highlighted that improved data capabilities would enable ASIC to make quicker, more informed decisions regarding resource allocation and enforcement priorities.

Additionally, ASIC’s proactive approach to combating investment scams has led to the takedown of approximately 5,000 scam websites since July 1, 2023. This initiative has been recognised globally, with ASIC now leading a new anti-scams working group of regulators in the Asia-Pacific region.

In his concluding remarks, Longo discussed the shared priorities of financial regulators worldwide, including the impact of AI, digital scams, private market growth, and sustainable finance. He expressed confidence that ASIC’s focus is aligned with global regulatory trends.