By any means, Joe Longo has a job to do.

The new head of the Australian Securities and Investments Commission has only been in the post since April and his opponents are already claiming the corporate watchdog has gone toothless.

There are accusations that the Federal Government is determined to forget the lessons of the atrocious Royal Banking Commission and willfully neutralize Asic’s ability to hold Australian companies to account.

In an interview with Guardian Australia, Longo, a lawyer who has spent much of his career – 17 years – with struggling German leviathan Deutsche Bank, says he is not the type to be muzzled and appears determined. to prove that detractors are wrong.

But the usual background murmurs among politicians and consumer advocates about Asic turned into open alarm last week after three words were removed from its business plan.

The words: “why not plead”.

The phrase comes from the Royal Commission on Financial Services, headed by Commissioner Kenneth Hayne. The commission heard story after story of misconduct where Asic got bogged down in endless back and forth with armies of bank lawyers.

Hayne in his final report in 2019 said that one way for Asic to go through the legal jungle with a machete was to stop negotiating and let a judge do the job of determining whether someone had broken the law. “Why not plead? The report says.

To help him ask this question, Asic then hired QC Daniel Crennan as commissioner. Armed with a handful of referrals from the Royal Commission, a team set to work producing ready-made briefs for top Asic officers.

As Asic took case after case to court, it seemed that a new philosophy had taken root within the regulator – one that might make those looking for the quick buck think twice before, for example. , charge deceased persons a fee for financial advice.

But last week came the deletion of the words.

Longo has since come out, sending a calming message to media, including Guardian Australia: the absence of the sentence does not mean Asic will stop pleading.

He was sometimes accompanied by Sarah Court, a new commissioner for Asic who left the Australian Competition and Consumer Commission, where she was seen as a tough regulator and a straight shooter.

The court isn’t on that particular Microsoft Teams call, but it’s clearly on Longo’s mind when it comes to litigation.

“We are both very experienced in this area,” he says.

“We’re sort of saying, well, that mantra won’t make any difference as far as I’m concerned, we’re going to continue to plead and maybe plead even more than before – I don’t know, we’ll have to see how the cases turn out. unfold.

Labor spokesman for financial services Stephen Jones thinks differently.

“It seems the government is taking us back to the days of Warning and assuming they will get a different result than last time around, ”he told Guardian Australia.

“You can set a date for another royal banking commission.”

But the truth is, it’s not just “why not advocate” that has disappeared from the new business plan.

Promises – or at least aspirations – that have been suppressed include “alleviating harm to consumers”, “tackling harm to consumers in an environment of high debt levels and hardship, with an emphasis on predatory loans ”and“ reduce the mistakes made by company directors and professional services providers ”.

From now on, Asic’s first priority is to “promote economic recovery”, which must be done “through better and more effective regulation, by facilitating innovation and by targeting regulatory and enforcement measures on the most dangerous areas. “.

Longo says it’s not a step back from the app.

“From my perspective, I have studied the business plan very carefully,” he says.

“And personally, I don’t see any backsliding from gentle pedaling or any other word people like to use on the law enforcement issue.”

He says, however, that in his business plan and another document called a statement of intent, Asic responds to the wishes expressed by treasurer Josh Frydenberg in a statement of expectations. And those expectations have changed dramatically.

In 2018, then-treasurer Scott Morrison wanted Asic to “reduce the likelihood that consumers will suffer losses due to misconduct by businesses and financial services licensees” and use his “box. regulatory tools complements and devotes a substantial portion of its resources to monitoring and enforcement “.

But now, Frydenberg says Asic should “identify and reduce the risk of misconduct through well-targeted and proportionate oversight, monitoring and enforcement activities” and “minimize the costs and burdens of regulatory requirements for entities. regulated and consumers “.

Longo says, “The statement of expectations bears the stamp of the current treasurer and the current government.”

“You know we’re in the middle of a pandemic, and it’s pretty clear that they are worried about the economy, and we expect us to do everything we can to promote good economic performance for everyone. .

“I think this is a completely understandable kind of exhortation, but I don’t think this document, or even by the government, intends that this be done at the expense of taking action against the evildoers.”

He points out that the new business plan specifically targets a host of online scams, according to Asic, which have arisen during the pandemic.

Longo arrived at Asic after a period of intense turmoil within the regulator, which has barely had a quiet moment in the past six years. He was rocked by wave after wave of banking scandals which led him to be denounced by the royal commission as incapable of effectively restraining big finance and its army of lawyers.

The banks have lobbied the government hard to relax the stricter regulatory environment produced by the royal commission, and they appear to have been very successful.

The treasurer, Josh Frydenberg. Photograph: Mike Bowers / The Guardian

Last year, Frydenberg decided to abolish responsible lending laws designed to protect Australians from borrow more than they can afford.

In November 2020, Frydenberg was in a state of war with Asic, determined to restrict the powers of the regulator. It has since done so, removing rules designed to keep the market informed and launching an assault on proxy advisers.

Crennan resigned amid a political storm over Asic’s rent payment, and President James Shipton also resigned payments made by the regulator to cover his tax advice. The two men were cleared after an investigation.

While Longo spent from 2002 to 2019 at Deutsche Bank, including as General Counsel for Asia and Europe, he has an Asic training: between 1996 and 2001, he was national application manager. of the law for the regulator.

Prior to that he was actually a corporate defense attorney in Perth.

“I went from defense to prosecution, if that’s the way the saying goes,” he said.

“I did this for six years and then got the opportunity to work internally for a bank in Germany, a leading global financial institution.

He says he has nothing to do with Deutsche Bank’s January deal to pay US $ 130 million to US authorities and admits he bribed Saudi and Abu Dhabi officials between 2009 and 2016 – which he was not aware of.

He was also not involved in an ongoing investigation by German authorities into Deutsche Bank and other financial institutions into allegations of facilitating tax evasion in what was known as “commerce. cum-ex ”.

“You focused on wrongdoing, but there are a lot of things Deutsche Bank has done extremely well, like payment systems,” he says.

He thinks the experience will make him a better regulator.

“I am very proud of my experience at DB, I chaired the Reputational Risk Committee, I did a lot of work there which I believe was in the interest of Deutsche bank, its shareholders and the market, ”he says.

Longo is keen to talk about the future and the tension between a government that wants Asic out of policy making and consumer advocates who want an active regulator.

“This policy issue is really interesting because the people, strictly speaking, including the staff at Asic and the consumers and Australians, they want an independent regulator,” he says.

“They want someone to watch over them and try to do the right thing, apply the law wisely. “

On the other hand, the regulator is required by law to administer its patch in accordance with government policy.

This is tricky territory for an agency that has law enforcement powers that can ultimately send people to jail.

“As it stands, I’m pretty optimistic about our independence,” says Longo.

“I am optimistic and energetic about our approach to law enforcement. “


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