ASIC is investigating possible criminal action against insurer ClearView over 300,000 unsolicited cold calls as it pledges to take more financial institutions to court for misconduct.
Australian Securities and Investments Commission chairman James Shipton admits the corporate regulator should have pursued criminal sanctions in a number of cases.
Mr Shipton said ASIC needed to take criminal and civil action more often.
‘Yes, we have made mistakes,’ Mr Shipton told the banking royal commission on Friday.
‘Yes there are case studies where, in my view, we should have, if the case was before us today, pursued criminal sanctions.’
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He said there is a criminal investigation into financial services company ClearView, which the royal commission previously heard committed 300,000 offences by making unsolicited cold calls to sell life insurance.
The ClearView case had previously been closed by ASIC through an agreement that declared its concerns resolved.
Mr Shipton admitted it was a mistake not to revisit the case earlier, when the regulator had more evidence that ClearView breached anti-hawking laws.
Mr Shipton said ASIC’s earlier approach had focused on industry-wide concerns and stopping pressure sales tactics used by a number of firms.
‘This is unfortunate and I think a mistake not to pursue the anti-hawking aspects of this matter.’
ASIC, which was criticised in the banking royal commission’s interim report for rarely going to court to punish misconduct, also plans to launch more civil cases.
Mr Shipton said civil litigation could be extremely expensive, saying ASIC’s bank bill swap rate action against major banks cost it $45 million.
‘I want to make it crystal clear we will be undertaking more court-based actions,’ he said.
‘We will be more adventurous, as it were, in pushing points of law.
‘We will be taking more – let’s call it risks – because we now have, through my direct engagement with the government, more funding to do exactly that.’
Mr Shipton said ASIC should be testing the limits of the law, as argued by the royal commission.
‘I firmly believe that there is a public interest in using court-cased admonishment and deterrence and punishment, particularly with larger financial institutions who have disappointed us and disappointed Australians so much.’
Mr Shipton said ASIC would also look at taking civil action against individual decision-makers.
The regulator would make less use of enforceable undertakings – used as an alternative to court-based enforcement action – for larger financial institutions in future, while also demanding more forthright and robust admissions of wrongdoing.