Former Speaker of the House Tony Smith (pictured) has called for Australian Securities and Investments Commission (ASIC) to be given new powers in the wake of the Prime Trust impasse, which has seen investors unable to claim $200 million in compensation following the collapse of the operator in 2010.
ASIC and Treasury have been unable to decide who should decide the claim against the watchdog, with ASIC saying its authority to decide Compensation for Detriment caused by Defective Administration (CDDA) claims expired in 2015, and Treasury saying that Treasurer Josh Frydenberg stepping in to decide the claim would undermine ASIC’s independence.
Mr Smith, who chairs a parliamentary committee overseeing ASIC, says that the regulator should have the power to decide claims against itself.
“The committee recommends that the government make such legislative or policy changes as are necessary to overcome any barriers to any treasurer in the future authorising ASIC to determine claims under the CDDA scheme,” he said in a letter to the Treasurer reported in The Guardian.
The bureaucratic dilemma has stalled any attempts by the investors to claim compensation for their losses, with Prime Trust founder Bill Lewski last year walking away from having to pay $190 million in civil claims relating to the demise of the company 12 years ago, though he was fined $230,000 and banned for running a company for 15 years in 2019.
