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ASIC to Crackdown on Market Sensitive Information

ASIC to Crackdown on Market Sensitive Information
May 29, 2015 By Simon Herrmann

Australian financial institutions have been warned of tougher penalties for the mishandling of market sensitive information. Greg Medcraft, the chairman of the Australian Securities and Investments Commission, said ASIC will push tougher regulation for white-collar crimes. At the Stockbrokers Association of Australia’s annual conference in Sydney on Friday, Mr. Medcraft said he hoped the tougher regulations would finally dissuade greedy practices. “Tougher penalties for white collar crime provide the right nudge to make sure the fear of getting caught can overcome greed,” he said.

In July last year, Newcrest Mining was fined $1.2m for subverting its disclosure requirements. The mining company was accused by ASIC of using selective meetings to disclose market sensitive information to analysts. The Australian news cycle has been plagued with stories of misconduct within financial institutions, according to Mr. Medcraft, and he disagrees with the notion that it is a rare occurrence. "When we find poor conduct and poor culture we generally find it is all across the organisation, and that makes us look deeper,” he said.

Regulators at ASIC hope to reveal and reduce the “rotten” culture among many Australian financial institutions. “When culture is rotten and inappropriate investments become worthless, it is not the wealthy who are being fleeced," Mr Medcraft said. "When culture is rotten it often is ordinary Australians who lose their money. Markets might recover, but often people do not.” He went further to say that financial institutions seldom punish employees who exhibit misconduct. The ASIC hopes stricter regulations will give an incentive to financial institutions to punish lawbreakers more harshly.  

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Simon Herrmann Author: Simon Herrmann May 29, 2015

Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.

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