a top submission ( whistleblower?), page-4

P3

Legions of well cut suits seemed to be regular visitors to the senior executive level of ASIC. I was not privy to these meetings and don’t know if they were company executives, advisors, lobbyists or lawyers, but they all looked frightfully serious and confident at the same time.
By contrast I never saw one aggrieved in investor or representative of an investors’ group make it to a meeting on ASIC’s executive floor. They just weren’t given the access.
At one point I was told by the ASIC Communications Manager that I should not have spoken to the Westpoint Action group early in 2006 and should not have set up a meeting in a downstairs meeting room with ASIC’s then chair Jeff Lucy to hear their tales of financial distress. Lucy, to his credit, fronted the meeting, listened intently and appeared to be quite shaken by the extent of the losses detailed. A flurry of court cases and asset seizures occurred. But progress was slow and in the months following the meeting the action group became disillusioned with what it regarded as lack of real zeal in getting their money back and took to demonstrating with placards outside ASIC’s office in Martin Place, as well as phoning frequently to ask what was being done to address their complaint.
This behaviour was regarded by ASIC as a nuisance, embarrassing and inflicting reputational damage it was determined to avoid. The Communications manager told me that I should have been able to see this adverse outcome and should not have engaged with the action group in the first place, that the group should not have met the chairman and put him in a spot. I was reprimanded for having made a poor decision to conduct a meeting with the victims’ group.
By the time Storm blew up I had left ASIC and was writing about its demise and aftermath for financial magazines. I then learned first-hand from other financial advisors who knew what was happening at Storm that they had contacted ASIC well before its demise warning that Storm was over-leveraging elderly clients and had put them in a one-product-suits- all model rather than taking into account investors’ individual needs to draw up an appropriate financial plan. The advisors reported that investors were at great risk. One lot of intel came from an internal Storm source. ASIC’s response, I was told, was that it does not take complaints and sour grapes tales from rival financial planners, or aggrieved employees, only from victims of financial fraud. Again it wasn’t listening.
Of course by the time Storm investors lost their money and complained to ASIC, it was too late. The horse had bolted, they had lost their retirement savings and many, their homes as well and were in Centrelink offices asking for help. There is need for ASIC to take intelligence on board and at least investigate and take action before the investment scheme the subject of complaints becomes a train wreck.
What could or should ASIC have done?
It could have taken on board warnings and whistleblower complaints and used its power to review client files, picked out say 20 client files at random at Storm to see whether Storm advisors were drawing up appropriate individual financial plans to meet the needs of its clients. That would have shown whether each investment plan was different, or whether they were all stamped from the same template. Such an inquiry would have shown that there was a sameness and a high risk and