ASIC facing heat over handling of alleged broker fraud

by Adam Smith09 Jan 2015
ASIC has found itself facing heat over its handling of an alleged $110m home loan fraud case.

Najam Shah and Aizaz Hassan of Footscray Company Myra Home Loan Pty Ltd earlier this week were arrested and charged with conspiracy to defraud over ASIC’s allegations that they conspired to defraud banks by creating and using false documents in support of home loans and house and land packages. ASIC said the alleged conspiracy involved false documents for more than 300 loan applications to lenders including Commonwealth Bank, Westpac, St George, Bankwest, Adelaide Bank, ANZ, Bank of Queensland, Choice Home Loans, Citibank, NAB, Pepper and Suncorp.

Now ASIC is facing criticism over its lag in taking action in the case, The Australian has reported. The Australian said Hassan was, until his arrest Tuesday, still operating as a licensed mortgage broker. His license was only cancelled after media coverage of the allegations, the paper claimed.

Labor senator Sam Dastyari has now called for ASIC to be brought before the Senate economics committee next month to explain its lag in cracking down on the brokers.

“This is outrageous. It’s once again a demonstration of ASIC failing to act when all the evidence is before them,” Dastyari told The Australian.

Dastyari claimed that the issue was not the regulator’s lack of power, but that it was not using the powers it already had.

“For those of us who have ­increasingly lost faith in ASIC’s ability to be the tough cop on the beat, situations like this reinforce the view, as Greg Medcraft said, that ­Australia is becoming a paradise for white collar criminals. There is this constant failure to act.”


  • by Vic Regional Broker 9/01/2015 9:17:37 AM

    Politicians can beat their chests in hindsight , which is wonderful thing.
    The fact is ASIC are basically underfunded and that did not just start with the current government , it has been going on since labour introduced the NCCP .
    I find it incredible that politicians jump on the bandwagon, when they also need to accept some responsibility for an under funded ASIC.

  • by Ray Weir 9/01/2015 9:58:29 AM

    As with previous State Government regulation of mortgage brokers, ASIC does not receive sufficient financial resources from the Federal Government to enable it to effectively carry out its compliance program or supervisory function.

  • by Tim 9/01/2015 10:31:11 AM

    True ASIC did take time to act but the question also has to be asked how long ago did the lenders know about these two.
    Why weren't their accreditations cancelled, were they reported to their aggregator and the MFAA/FBAA.
    We heard last year about a broker whose accreditation was cancelled without any explanation by a major bank even though he was not accused of any wrong doing and claimed he had not committed any and yet these two have been known to be crooked for some time and yet one of them was still allowed to operate as a broker up till last Tuesday.
    There appears to be a lot of explaining to be done here.