ASIC says it’s ‘emotionally inappropriate’ to apologise to victims of Sterling collapse

By Neil Griffiths

November 22 2021
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The corporate regulator has conceded that it could have acted differently in response to concerns with the Sterling Group but has refused to apologise for the matter.

A Senate inquiry this week looked into the group – which eventually collapsed in 2019, leaving more than 100 customers facing possible eviction and heavy financial losses – and featured appearances from a number of groups and bodies, including ASIC and the Financial Planning Association of Australia (FPA).

The FPA, as well as corporate litigator and investigator Niall Coburn, addressed concerns with the regulator, one of which being it was slow to act on the Sterling Group.

In a second appearance at the inquiry, chair Joe Longo acknowledged that more could have been done by the regulator at the time it received complaints.

“With the benefit of hindsight, we would have more closely engaged with the responsible entity on whether our concerns with the PDS were addressed,” he said.

“We may well have stopped the replacement PDS.”

However, when asked by Senator Jordon Steele-John if ASIC would offer an apology to the victims, Mr Longo said it would not be “emotionally inappropriate”.

“At ASIC, we do our best to look out for people who make investments … these individuals tragically made an investment,” Mr Longo responded.

“They signed a lease that was linked to an investment and that proved to be something that we now all know led to great losses for them personally.

“It’s emotionally inappropriate for me to say that ASIC should be apologising for that.

“I think what ASIC can say is that we’ve tried to respond to the issues that have been brought to our attention, tried to act in good faith, tried to be helpful to secure the interest of investors. But we now know that the tenant investors got caught up in a scheme that wasn’t sustainable.”

On Tuesday (16 November), Mr Longo admitted that ASIC received “two or three complaints or reports of misconduct … in late 2016, early 2017”; however, it did not become officially involved until a referral by the Western Australia Department of Mines, Industry Regulation and Safety in March 2017.

Mr Steele-John said the evidence shows that ASIC should have “acted quicker and shouted louder” when investigating the group.

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