watchdogs are a joke

  1. 1,508 Posts.
    "All the while the ASX and ASIC did not even have the guts to summon a press conference. Even Mick Gatto and the Melbourne underworld put on a better show."

    The regulators have just become defendants.

    Opes Prime had warned both the ASX and ASIC in February that it was in breach of its liquidity requirements. Both failed to act. Any client of Opes whose exposure to the collapsed Prime broker increased between that time - at the latest - and the collapse in March presumably has an action against the regulators.

    ASX supervision boss Eric Mayne should fall on his sword immediately. ASX chief executive Robert Elstone should, in the least, consider his position. The Government moreover should now move to strip the ASX of its supervisory powers. Its dual role as a profit-driven company and market supervisor has become a joke.

    Thousands of company directors across the country have been personally and professionally affected by the collapse of Opes and Lift Capital. They cannot possibly take the ASX seriously, and they have to report to it. Legions of investors likewise - they have to believe in it.

    If the regulators were this sloppy on a basket case of Opes dimensions, every market participant must now ask: what is next? While the ASX has been busy booking its billions in bullmarket profits, what other brewing disasters is it missing?

    The growing ranks of Opes class action plaintiffs looking for deep pockets to sue (Opes directors won't cover it and the ANZ and Merrill Lynch are already in the lawyers' crosshairs) may even join the ASX for earlier oversight.

    It appears that the ASX did a site visit of Opes last October and failed to identify any irregularities, or if it did, did nothing about them. Worse, according to one report, Opes was encouraged by ASX to exploit a loophole which allowed the collapsing prime broker to funnel $1.3 billion in liabilities to a company which did not require an AFS (Australian Financial Services) licence. ASIC, the supposed corporate watchdog knew this.

    This reporter is no fan of excessive inquiries, but the abject failure of the regulators probably means there should be a government inquiry into Opes et al. This is a systemic failure. By all accounts there are more collapses to come and the sheer patheticness of the regulators simply cannot pass.

    ASIC in its present form should also go. Confidence is gone already.

    Even if these two watch-poodles could not prevent the Opes collapse, they were still found wanting when it happened, ensuring total chaos prevailed as hundreds of companies struggled to meet disclosure requirements, Tricom ripped its shares out of the Opes pool with the connivance of the ANZ bank, the courts were forced to handle angry Opes litigants and it was left to the media to speculate on unfolding events as investors foundered in the dark.

    All the while the ASX and ASIC did not even have the guts to summon a press conference. Even Mick Gatto and the Melbourne underworld put on a better show.

    For week after week, reporters from every serious media organisation have been in touch with the ASX and ASIC wanting to know what was being done. They have been stonewalled at every turn and now it turns out that the regulators had the chance to do something earlier.

    This PR approach of working against the press and the public to save your skin and hope that things blow over has backfired. They have lost control, they have lost confidence, they require urgent repair.
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