Opinion piece - Australian Financial Review, 26 March 2015
One of ASIC's priorities is to ensure financial markets are fair and efficient and that means cracking down on people seeking to manipulate the markets and engage in insider trading.
And with around $1.6 trillion invested in superannuation, much of it in the share market, Australian mum and dads would expect nothing less.
ASIC is an enforcement agency so when we see this sort of corporate misconduct, we take action, especially on insider trading.
We have many tools at our disposal to confront this conduct – we have the people, we have the technology and we have our compulsory powers. And, increasingly, telecommunications information is central in bringing inside traders to justice.
We have used telecoms information in high-profile inside trading cases, for instance, last week's Kamay and Hill case, the recent Genetic Technologies matter and UCL Resources case. In fact, in the two years to November 2014 ASIC used telecoms data in more than 80% of our insider trading cases.
ASIC is able to use these powers because it is defined as an 'enforcement agency' under the Telecommunications (Interception and Access) Act 1979 (TIA Act). Right now, we have the ability to access telecoms data and, via warrant, stored communications. But this can only be accessed for law enforcement purposes – we cannot use the information for our wider regulatory role.
The Parliamentary Joint Committee on Intelligence and Security, in its inquiry into changes to the TIA Act, recommended ASIC be included in the statutory definition of a 'criminal law enforcement agency'. This is crucial: it ensures ASIC retains its current powers and can keep fighting corporate crime.
Changes to the TIA Act do not give law enforcement agencies any new powers but aim to ensure crucial existing powers retain their utility and are not eroded because of profit-driven changes in commercial practices.
Telecoms data is crucial in combating corporate crime – this sort of information is commonly the first source of important information for further investigations and is frequently used to identify suspected offenders or verify preliminary suspicions. Without this data many offences and offenders would never be detected or investigations would be prematurely discontinued due to lack of evidence.
Telecoms data is also particularly crucial in establishing the grounds to obtain warrants authorising more intrusive investigatory measures, such as search warrants or (for interception agencies) telecoms interception warrants.
This data is an essential ongoing source of intelligence and evidence during ASIC investigations and in subsequent proceedings. In particular, it is often important to make connections, show relationships and prove communications actually happened, especially when you do not know the actual content of that communications. And telecoms data is also essential in working out which people should be excluded from investigations.
In 2013-14, ASIC used this power for criminal investigations on 1,771 occasions and civil penalty investigations on 110 occasions.
ASIC is a major criminal law enforcement agency with a specific statutory responsibility for investigating and prosecuting criminal offences under the Corporations Act. In the five years to 2014, ASIC secured criminal convictions against more than 2,500 people including 68 people going to gaol.
These white collar crimes are notoriously difficult to prove and can cause immense harm to Australia's financial system, including damaging the integrity of our financial markets, and devastation to individual victims who risk losing their homes and life savings.
That is why we use these telecoms powers and that is why we need to retain them.
Greg Tanzer is a commissioner with the Australian Securities and Investments Commission.
This piece was published by the Australian Financial Review on 26 March 2015.