Login
ISCOVER
ASIC has defended the way it has handled the alleged $110 million mortgage fraud that has rocked the industry.
The regulator announced last week that it had arrested two Melbourne brokers in relation to an alleged fraud involving at least 350 loans through a dozen lenders between 2008 and 2011.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
ASIC’s actions have since come under attack, with questions raised about why ASIC took so long to act, why it has not disclosed more information and why a third person of interest was allowed to leave the country.
In a statement released on Friday afternoon, ASIC criticised “inaccurate and speculative” mainstream media reporting and emphasised its “clear commitment” to fighting loan fraud.
The regulator also explained that it has no power to prevent people from travelling and that court orders to that effect are difficult to obtain.
“In some instances seeking an application for a travel ban would only serve to alert the person of interest that they were under serious investigation and could thwart a complex investigation,” it said.
ASIC also said the investigation of the alleged fraud has been a long, complex and extremely sensitive operation.
“There are some important parts of the investigation which we are not able to divulge,” it said.
“In some matters, such disclosure could jeopardise the entire case. In others, it could put people at risk.
“During an investigation, the premature public release of information could result in evidence being destroyed by an accused.
“And there are important legal restrictions on the information we can make public. We are expressly required to maintain the confidentiality of information we obtain in connection with the exercise of our functions.”
ASIC also defended itself against accusations that it should have warned the employer of one of the accused brokers before he was arrested.
“ASIC, like other law enforcement bodies, does not as a rule flag an impending arrest to an employer, or, for that matter, to other related parties,” it said.
“To do so would increase the risk of the person of interest being tipped off, even if this was inadvertent.
“It would potentially place the employer in a compromised position. For example, the employer may wish to suddenly treat the employee differently – perhaps even sack them. How could this occur without affecting the confidentiality of the investigation?”
[Related: Alleged $110m mortgage fraud may have been inevitable]
