ASIC process in need of change Illustration: Rocco Fazzari. Come September 14 there might be a shuffling of the decks in federal politics but it won't stop the call for an inquiry into the performance of the corporate regulator, which was established 22 years ago. Nationals senator John Williams is seeking a Senate inquiry into the Australian Securities and Investments Commission (ASIC) after BusinessDay revealed it took 16 months to formally investigate a detailed report into misconduct from a group of Commonwealth Bank insiders. He needs 39 votes to get his request across the line but he has some good support from all sides of politics. It is not the first time ASIC has been criticised about its slowness to act. It was ASIC's poor record in investigating complaints that prompted a Senate inquiry into liquidators in 2010, which resulted in some damning findings about ASIC's regulation of the sector. A key reason for the inquiry into liquidators was the actions of Stuart Ariff, a liquidator who is serving a six-year jail term after being found guilty on 19 counts of criminal fraud relating to HR Cook Investments. A freedom of information request reveals ASIC received at least 60 complaints about Ariff, while he continued to practise and acquire more clients. The spotlight was shone on Ariff in a series of articles I wrote in October 2007 when a Malaysian creditor contacted me after giving up on ASIC over its lack of interest in what was going on in CarLovers Carwash. The creditor, Berjaya, had contacted ASIC in 2005 with receipts, invoices, and later a forensic accounting report to support its allegations that Ariff had kept CarLovers in administration for three times longer than necessary. ASIC fobbed off Berjaya with a standard letter. The point is ASIC has a lot of powers but it doesn't use them properly. There is too much emphasis on process and box-ticking rather than enforcement. It explains why a number of staff become frustrated. They want to do the right thing but its process-driven culture prevents them. It explains why the CBA whistleblowers fell between the cracks. The whistleblowers tipped off ASIC then sent letters when they hadn't seen any visible action. They got passed from pillar to post. In an email on November 10, 2008, they sought confirmation their tip-off had been received and followed with an additional warning "there has been ongoing work to clean up files over the past week or so." ASIC's response was perfunctory: "As you may be aware, email is not a secure form of communication; it may be possible for others to view information sent by email. If you are happy for us to continue to communicate with you by email please let us know. Otherwise, we will communicate with you by ordinary post. By November 25, 2008, ASIC informed them their "issues" had been referred to ASIC's Financial Advisers team for further consideration. You will be contacted again in due course. It was then radio silence until February 12, 2009, when the whistleblowers again inquired if there was any action being taken. "As it would appear that the actions of this adviser are becoming well known throughout the CBA, as many clients who have issues with him are coming forward ..." they wrote. ASIC's response almost a month later was another fob-off: "As advised the issues raised in your complaint [have] been referred to ASIC's Financial Advisers team. It appears that the issues are still currently being considered and we will contact you in due course. If this is due process for ASIC, that process needs to change. At no time during this correspondence did ASIC ask the whistleblowers to come in and give more information. The regulator kept them at arm's length. Indeed whistleblower Jeff Morris, who revealed his identity due to his frustration with ASIC, said even when the whistleblowers turned up to ASIC's head office in February 2010, the regulator never took him up on his offer to help identify the trail of misconduct. CBA financial planner Don Nguyen resigned on July 6, 2009, and ASIC waited to formally investigate in February 2010. According to a diary note kept by Morris, a conversation with an ASIC official handling the case went something like this: "If you hadn't come in that day [i.e. our initial meeting of February 2010] this wouldn't have landed on my desk and nothing would have happened if it hadn't come to me. I can tell you that report you sent in had been bouncing around here for 18 months and nobody else knew what to do with it. ASIC was given the officer's name and the date the conversation allegedly took place. It refused to comment. Nguyen was banned from working in the financial services industry in March 2011. He appealed and lost the following year. Six other planners were banned and CBA received an Enforceable Undertaking, which it is working through. But it doesn't heal the wounds of some clients who lost more than half their life savings, forcing them to seek help from Centrelink as they battled with CBA for compensation. Like Senator Williams, they want some answers as to what really went on.