COVID-19 FOI Request: Misrepresentation of the Jurisdiction of ASIC

Phillip Sweeney made this Freedom of Information request to Australian Securities and Investments Commission

Currently waiting for a response from Australian Securities and Investments Commission, they must respond promptly and normally no later than (details).

From: Phillip Sweeney

Delivered

Dear Australian Securities and Investments Commission,

Warren Day, Executive Director, Assessment and Intelligence, testified before the Joint Parliamentary Committee on Corporations and Financial Services on 15 July 2020.
Mr Day testified in response to a question from Senator Pratt:

“None of ASIC’s investigations are on pause because of COVID or pandemic issues.”

Mr Day also provided written testimony to the former Chair of the House of Representatives Standing Committee on Economics in a letter dated 5 September 2018 {ASIC Ref CCU-18\0397} which is now relevant to the COVID-19 pandemic.

Prior to 1 July 2019 ASIC staff were subject to the Public Sevice Act 1999 and subsection 13(9) states:

“ (9) An APS employee must not provide false or misleading information in response to a request for information that is made for official purposes in connection with the employee's APS employment.”

In his letter dated 5 September 2018 Mr Day makes the following representation to the former Committee Chair:

“After extensive review, ASIC determined not to take further action because, variously:
- ………
- ASIC did not have jurisdiction to pursue these matters (such as to enforce obligations under private trust or contractual arrangements or under state-based trust law}
- ………..
- ………..

The Defined Benefit superannuation scheme in question is a “regulated superannuation fund” where an election has been made pursuant to Section 19(4) of the Superannuation Industry (Supervision) Act 1993 to become part of a Commonwealth Government regulated superannuation system.

Therefore this particular Defined Benefit superannuation scheme is subject to regulation by ASIC and APRA. A Memorandum of Understanding (MOU) exists between ASIC and APRA to ensure the safety of retirement benefits in a COMPULSORY superannuation system

{Refer to the ruling of the High Court in Attorney-General (Cth) v Breckler [1999] HCA 28; 197 CLR 83}.

Furthermore, subsection 13(1) of the ASIC Act 2001 states:

“(1) ASIC may make such investigation as it thinks expedient for the due administration of the corporations legislation (other than the excluded provisions) where it has reason to suspect that there may have been committed:
(a) a contravention of the corporations legislation (other than the excluded provisions); or
(b) a contravention of a law of the Commonwealth, or of a STATE or Territory in this jurisdiction, being a contravention that:
(i) concerns the management or affairs of a body corporate or managed investment scheme; or
(iii) involves fraud or dishonesty and relates to a body corporate or managed investment scheme or to FINANCIAL PRODUCTS.”

On the 5 September 2018, the entity that had the legal obligation to pay the correct benefits to the correct beneficiaries of this particular Defined Benefit superannuation scheme was National Australia Bank’s subsidiary company NULIS Nominees (Australia) Limited {NULIS}.

It is not disputed that the assets of this particular superannuation scheme were transferred to the control of NULIS on 1 July 2016.

So in effect, Warren Day was claiming to the former Committee Chair of the Standing Committee on Economics that:

(i) - ASIC had no jurisdiction because NULIS was administering a “private trust” which provided a ‘financial product’ (ie superannuation) that was subject to state laws.”

Now even if this was the case then ASIC does have jurisdiction pursuant to subsection 13(1) of the ASIC Act 2001.

Furthermore on the VERY NEXT day after making this false representation to the former Chair of the Standing Committee on Economics ASIC issued a Media Release advising that ASIC had commenced proceedings against NULIS in the Federal Court.

{Refer to Media Release “18-259MR Fees for no service: ASIC commences Federal Court action against NAB companies” dated Thursday 6 September 2018}.

So Warren Day contravened subsection 13(9) of the Public Service Act 1999 in his written testimony to the former Chair of the Standing Committee on Economics.

These proceedings were commenced even before Royal Commission Hayne released his Final Report in February 2019.

The documents I seek are copies of documents that would reveal to financial journalists and the general public the contraventions of legislation administered by ASIC and the general law in these proceeding in the Federal Court where the day before Mr Day claimed to the former Chair of the Standing Committee on Economics that ASIC had no jurisdiction involving this particular trustee of a number of regulated superannuation funds.

Yours faithfully,

Phillip Sweeney

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