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Tuesday 9 April 2013

13-073MR ASIC releases policy on cooperation and third enforcement report

ASIC today released its approach on dealing with people who cooperate with its investigations.

Key points:

  • It is ASIC policy to encourage and fully recognise cooperation

  • Our guide increases the public’s understanding of how ASIC works

  • Latest enforcement figures show half involved cooperation

ASIC referred to cooperation when it released its approach to enforcement in February 2012 (refer 12-29MR). Information Sheet 172 Cooperating with ASIC (INFO 172) explains the benefits of cooperating with investigations, and the factors we take into account when assessing cooperation.

‘This release is part of our commitment to improving transparency’ ASIC Deputy Chairman Belinda Gibson said.

INFO 172 follows releases on ASIC’s information gathering powers (refer 11-194AD), public comment and enforceable undertakings (refer 12-29MR), surveillance work (refer 12-224MR), and claims of legal professional privilege (refer 12-314MR).

‘Altogether this information increases the public’s understanding of how ASIC uses its enforcement powers to achieve its objective of penalising those who breach and deterring others from breaching, and what to expect if we knock on your door,’ Ms Gibson said.

Cooperating with ASIC may benefit a person or company in many ways. For example, cooperation will be relevant to ASIC's decision on the type of enforcement action to pursue or remedy to seek and we will give due credit for cooperation in proceedings we commence.

‘A cooperative approach could also mean a quicker resolution of the action taken for the misconduct; time and cost savings for ASIC, and better outcomes for affected consumers,’ Ms Gibson said.

ASIC enforcement report – July to December 2012

ASIC released the third of its six-monthly enforcement reports, detailing enforcement outcomes achieved in the period 1 July 2012 to 31 December 2012.

The report summarises ASIC’s actions against a range of gatekeepers in the Australian financial system, such as financial advisers, auditors and directors. ASIC focuses on four key attributes of gatekeepers: competence, diligence, honesty and independence.

During the period, 44 of the 88 enforcement outcomes achieved in the market integrity, corporate governance and financial services areas involved cooperation between the person concerned and ASIC.

Examples of cooperation include:

Early guilty pleas

Nicholas Glynatsis (refer 12-313MR), Joseph Levi and Elisa Rietbergen (refer 12-305MR). These people received discounts off their sentences for insider trading for having cooperated with ASIC and pleading guilty at the earliest opportunity.

Negotiated outcomes

  • GE Money changed its online advertising of personal loans and debt consolidation following ASIC concerns the advertising was potentially misleading (refer 12-198MR).

  • RHG customers were refunded more than $3.3 million following ASIC concerns about discharge and early termination fees on some home loans (refer 12-169MR).

  • AMP Horizons improved its compliance measures following ASIC concerns with its advice processes (refer 12-326MR).

Enforceable undertaking (EU)

  • 12-186MR Former ABC Learning Centres auditor prevented from auditing companies for five years

  • 12-248MR Sydney liquidator’s registration cancelled

  • 12-267MR Perth lender enters into enforceable undertaking and pays credit infringement notice penalties

  • 12-270MR Cairns financial adviser agrees to supervision following ASIC concerns

  • 12-277MR Sydney liquidator agrees to cancellation of registration

  • 12-288MR Former Centro auditor suspended

  • 12-291MR ASIC accepts enforceable undertaking from financial adviser

On 13 December 2012 ASIC accepted an enforceable undertaking from Simon Durant, a director who was disqualified in 2009 from managing a corporation for two years. Mr Durant acknowledged ASIC’s concerns that he may have performed management duties during the disqualification period and offered ASIC an enforceable undertaking restraining him from managing a corporation for a further two years (refer 09-174AD).


  • Information Sheet 172 Cooperating with ASIC INFO 172

  • Report 336 ASIC enforcement outcomes: July to December 2012 (REP 336)


Previous reports on ASIC’s enforcement outcomes are:

  • Report 281 ASIC enforcement outcomes: July to December 2011 (REP 281)

  • Report 299 ASIC enforcement outcomes: January to June 2012 (REP 299)

In February 2012 ASIC published Information Sheet 151 ASIC’s approach to enforcement (INFO 151). This document explains how ASIC approaches its role and ASIC responds to particular types of breaches of the law in different ways.

ASIC can pursue a variety of enforcement remedies. The particular remedy or combination of remedies which ASIC pursues will depend on the regulatory objective ASIC is seeking to achieve.

In February 2012 ASIC also released Regulatory Guide 100 Enforceable undertakings (RG 100) outlining what an EU is and when ASIC will consider accepting an EU (refer 12-29MR).

ASIC considers an EU can sometimes offer a more flexible and effective regulatory outcome than could otherwise be achieved through other available enforcement remedies. Importantly, we see enforceable undertakings as influencing behaviour and encouraging a culture of compliance for the benefit of all participants in the markets we regulate.

Last updated: 09/04/2013 12:00