16 Sep ASIC defends appeal over ‘Wagyu and Shiraz’ ruling
James Frost and Joanna Mather – The Australian Financial Review – Friday 13 September
The Australian Securities and Investments Commission has been forced to defend the regulator’s performance in the wagyu and shiraz case that saw its arguments that Westpac broke responsible lending laws close to 300,000 times dismembered by a Federal Court judge.
Liberal National Party MP James Paterson wasted no time in zeroing in on the regulator’s failure in the case and corresponding decision to challenge the judgement.
“Those opinions found there were issues worthy of exploration via appeal,” Mr Shipton said.
“We believe there is net benefit to all of those involved. There would be greater harm by not appealing.”
Mr Shipton also rejected the arguments the responsible lending laws had contributed to a tightening of credit either now or anytime during the ten years they had been in existence.
“To date, no evidence has been put to me at least is that the rules as they currently stand has held back credit growth.”
There was a risk that deterioration in lending standards would lead to harm that may take many years to materialise and could be disastrous for consumers and lending institutions, Mr Shipton said.
He furthermore said it was important for the regulator to pursue test cases such as these in order to seek clarity.
Mr Paterson quipped “I think the advice from Commissioner Hayne was ‘Why not litigate? Not, Why not appeal?'”
Appearing alongside the chairman was Commissioner Sean Hughes who said there was a risk that following the judgment that lenders could ignore the rules and do what they liked.
“If the judgment is allowed to stand there is a risk that lenders can say ‘whatever is in ASIC’s guidance and whatever is in the act,’ they will say, ‘well I can do whatever I like’ and we cannot let that happen.
“That is something that is weighing very heavily on our minds and that is why we are bringing this appeal.”
In his opening remarks, Mr Shipton said the regulator was committed to effective enforcement action with an emphasis on pursuing cases featuring egregious misconduct and would deter others from similar actions.
The regulator said since February 2018 to the present day ASIC had seen a 24 per cent increase in enforcement investigations, 130 per cent increase in enforcement investigations involving the big six financial firms and a 241 per cent increase in wealth management investigations.