How brokers get banned: ASIC reveals its techniques

by Robin Christie05 Oct 2012

Have you ever wondered how and when tip-offs and complaints actually result in ASIC action against rogue brokers? Here’s how.

 
ASIC yesterday released information regarding how it handles tip-offs, complaints, information of concern and reports of misconduct.
 
With the regulator receiving more than 20,000 reports of misconduct each year, ASIC Commissioner Peter Kell explained that – while all reports are received, acknowledged, analysed, assessed and recorded by ASIC’s national misconduct and breach reporting team – not all reports actually result in ASIC action.
 
“All reports of misconduct provide us with valuable information but not every matter brought to our attention requires us to take action,” he said, adding that ASIC’s new information sheets are aimed at explaining “how such cases are handled”.
 
So how does ASIC’s reporting team decide which cases to pursue? The regulator weighs every report of misconduct against four key questions:
  • What is the extent of harm or loss?
  • What are the benefits of pursuing the misconduct?
  • How do other issues, like the type and seriousness of the misconduct and the evidence available, affect the matter?
  • Is there an alternative course of action?
 
Kell noted that ASIC has released the How ASIC deals with reports of misconduct brochure “to help people better understand the factors we consider in our assessment of their misconduct report at the first point of contact”.
 
“It outlines the timeframe in which we will communicate our decision on whether we will or will not consider a matter further,” he added.
 
“Every piece of information we receive, whether it be a tip-off, complaint or report of misconduct is assessed by ASIC. From that initial assessment matters may be referred for surveillance or investigation. If they are not, we identify other things the person concerned should do. But all information received by ASIC is recorded, assessed and valued.”

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