That’s not really doing much, guys

July 10, 2014

The International Advisor rag has an article where it seems that the ACI is self-congratulating itself on a job well done. Namely, getting our cause included in the recent Senate Inquiry:

In the June report on the performance of the Australian Securities and Investments Commission, the ACI was quoted as stating that the ASIC failed to take “substantial early steps to deal decisively with the causes and results of this corporate collapse contrast starkly with the quick action and early prosecutions after the Bernie Madoff scandal broke in the United States.”

According to ACI chairman Simon Litste, who represents Japan for the group, the Senate Report is quite damning on the ASIC‘s role with not just the ACI “pointing a finger at a tardy regulator. Nevertheless, we take comfort from the fact that our efforts and protests have reached government”.

I don’t know, but it’s not just a “tardy regulator” that led to this fiasco. How about the fact it’s the people in the ACI that sold an unregulated fund? Didn’t that come up in the due diligence reports? Plus, what does it even mean to call ASIC a “tardy” regulator, when the fund wasn’t even registered in the first place. What’s ASIC supposed to do, telepathically just know that this fund was being sold to retired folk and conservative investors around the world, offshore?

If any ACI people are reading this: Look, I know you’re doing lots of work and there’s probably some very well intentioned souls amongst you. But even you have to admit that there is going to be a healthy amount of cynicism until something is done along the lines of, you know, actually recovering actual funds.

Putting LM on ASIC’s plate

June 29, 2014

Fallout from the Senate Inquiry is plain: ASIC is going to have its hands full. Reading stuff like this and this, makes me wonder how LM implosion the attention it deserves. While I may well be wrong about this, it just seems that it is difficult to fathom recovery strategies for investors such as us that don’t depend on ASIC having a large supporting role.

For example, my own research reveals that LM MPF was definitely a Ponzi scheme, but me saying that means nothing. We need someone like ASIC to declare that, you know, yeah, it was.

Perhaps job #1 is getting the LM implosion as much a part of this narrative as the Commonwealth Bank is in ASIC’s legacy.

ASIC gets thumped by Senate Inquiry

June 27, 2014

Imagine you’re a federal agency and you just got like 60 recommendations dumped on your lap after a full-scale inquiry. As far as I can tell from this summary, there is no immediate implication on overseas investors. If you’re an Australian, though, you will probably want to see if any of this is retroactive (probably not, I imagine).

In addition, this article contains a summary of the events that led up to the Senate Inquiry into ASIC, explained in plain language:

The scandal occurred when “cowboy” planners within the business — who were striving to maximise commissions — steered more than 1000 clients into ill-advised investments, sometimes without their knowledge and approval, according to evidence before the committee.

It’s worth noting that even within Australia it looks like ASIC was turning the other way on certain things.

ASIC gets more condemnation

June 4, 2014

There’s an article out today that carries the story about ASIC’s utter failures:

A KordaMentha spokesman said the firm sold all the fund’s property assets and was now trying to claw back $19 million owed by Mr Drake.

It is also looking into what legal action it can take against Mr Drake and others involved in the collapse.

ASIC hasn’t taken any action against Mr Park and Ms Muller, who have lodged an appeal against the August ruling. An FTI spokesman declined to comment.

I’m surprised that the LM collapse isn’t getting more traction in the media than it is, considering.

New powers to ASIC?

April 23, 2014

Today in the news, on the back of the Senate Inquiry, are two different articles that tries to look predict what new powers ASIC may be given in a  report in the coming months:

ASIC should be given powers to pursue compensation on behalf of consumers, with the corporate regulator given the first right to sue ahead of investors involved in class actions.

It would remain to be seen if this, or any, new powers that ASIC inherits could be applied retroactively.

Michael West’s Ongoing Coverage of ASIC

April 5, 2014

While this does not directly deal with LM Investments, readers should be aware that ASIC, the government entity responsible for policing the investment community in Australia, has been undergoing a firestorm of criticism of late. There was a Senate Inquiry held a few weeks back where complaints were aired… and the chairman dodged any vestiges of the corruption. (He claims they aren’t funded well enough to do their job!)

Anyway, while readers here may not be particularly interested in the ins and outs of that particular saga, one thing worth reading is this piece from Michael West who profiles what it is like actually working for ASIC:

In explosive evidence before the Senate Inquiry into the Performance of ASIC, the lawyer James Wheeldon described the corporate regulator as tainted by corruption. He left in disgust in 2005 after his advice on fee disclosure was abandoned and he was asked to work under the instruction of a lawyer on secondment from the National Australia Bank’s wealth management operation, MLC.

I actually don’t know what a secondment is, but it sounds like it’s similar to a lobby group asking for special consideration in order for an exception to be made to a law. In the US, only lawmakers can make an exception, but it sounds like in Australia that ASIC has the power to do so as long as it doesn’t run against Parliament? [Ed. note: A reader explains in the comments. I wasn’t even close…]

I’ve bookmarked this area on the Sydney Morning Herald and have made it a habit to go there a few times a week in order to see what West is writing about.

Avoid investing in Australia as long as ASIC is still around

February 22, 2014

Another politician goes on the record as being against ASIC.