Speaking to InvestorDaily, Levitt Robinson principal Stuart Levitt said ASIC should be excluded from negotiating compensation for victims of malpractice in the financial services industry.
The regulator has obligations under the ASIC Act to ensure the law is given “full force of effect” and, as such, ASIC cannot simply keep “breaking deals with everybody”, Mr Levitt said.
In picking and choosing the liquidators and insolvency practices it deals with, ASIC is acting in a manner which would fall foul of the NSW ICAC legislation that stipulates entities cannot act in a manner that is partial or shows a preference, he said.
“A lot of the conduct of ASIC would be found to be corrupt if it were put to the NSW test – but there is no such test at the federal level,” said Mr Levitt, adding that because of this, ASIC and the Australian Federal Police are left to investigate themselves.
“ASIC are constantly making decisions which appear to be determined by the relationships they have,” he said. “There is so little control. You’ve got people moving from being the investigators to the investigated – and making deals with the investigators.”
“It is incredibly incestuous and there is no control over it at all,” said Mr Levitt.
Update: A spokesperson for ASIC said the regulator "completely rejected" the inference of any corruption - adding that "ASIC is not in the business of doing favours for anyone".
"We are an independent enforcement agency and our employees work here because they believe in what we are doing and they respect the public interest. Suggesting otherwise is a smear on the reputation of this organisation and more to the point, its hard-working men and women," said the spokesperson.
"We apply the law without fear or favour," he said.
