by Dr. Andrew D. Schmulow
Australian Financial Review, (2019), published electronically.
Much has been written about two recent court defeats suffered by ASIC and APRA, some of it facile. It is time to set the record straight.
Very briefly, the Australian Securities and Investments Commission sued Westpac, alleging reckless mortgage lending. ASIC lost. This was the judgment in which Justice Nye Perram opined that a borrower could remedy unaffordability by, for example, forgoing their Wagyu beef and shiraz.
The second involved the Australian Prudential Regulation Authority and directors of IOOF. In particular Christopher Kelaher, the CEO. He admitted before the banking royal commission that IOOF had used member’s money to remunerate members for errors caused by IOOF.
The Federal Court last week dismissed APRA’s case dismissed APRA’s case, calling it “unpersuasive” and ordering the regulator to pay costs.
Since then, everyone has been piling into ASIC and APRA, asserting they are equally hapless. They are anything but.