AARON PATRICK: ASIC corporate cop Joe Longo waged legal warfare against business

The chief corporate regulator, Joe Longo, will step down after five years waging legal warfare against some of Australia’s biggest companies and financial institutions.

The 66-year-old Australian Securities and Investments Commission chair said he would not seek reappointment when his term ends in May, a decision that gives Treasurer Jim Chalmers an opportunity to hire a regulator who can have a big impact on the economy through setting and enforcing rules over the 2.7 million businesses operating in Australia.

Agency watchers said the leading internal candidate was deputy chair Sarah Court, a former government lawyer. Ms Court oversaw the prosecution of the ANZ Bank which ended last week with a $240 million fine, the largest in ASIC history, and an admission from the bank it misled clients and exploited customers.

The Government is expected to choose a replacement who will continue Mr Longo’s high-profile approach of suing companies, investment managers and superannuation funds.

“When I accepted the position, I was clear ASIC needed to become a modern, confident and ambitious regulator,” Mr Longo said. “The ASIC of today is better fulfilling what Australia needs of it.”

Losing temper

Originally a lawyer from Perth, Mr Longo’s position appeared at risk two years ago when he lost his temper with subordinates at a meeting to discuss prosecutions. A complaint was made to the Government and leaked to the press. Mr Longo apologised and expressed regret.

No further concerns were raised publicly about his behaviour, and even critics expressed respect for his resilience in frequent press conferences and regular appearances before parliamentary committees.

Under his tenure, ASIC’s reputation as a lumbering bureaucracy that could take up to a decade to punish corporate misbehaviour was dispelled.

Whereas in the past ASIC often preferred to work with large companies to influence their behaviour, Mr Longo led a new expensive and risky strategy of suing some of Australia’s most prominent businesses.

They included ASX, the share market operator, which it accused of lying about a botched upgrade of the computer system that tracks who owns shares.

Investigations more than doubled and some 10,000 investment scams were shut down. He oversaw an expansion of ASIC’s responsibilities after a royal commission into banks that ended in 2019 and led to new penalties for corporate directors and managers of superannuation funds.

In 2024 a specialist team was created to expedite criminal insider trading cases.

Former ASIC commissioner Daniel Crennan, KC, said Mr Longo led an increase in prosecutions that culminated in the lawsuit against ANZ, which would help deter other financial institutions from breaking the law.

“The cases from ASIC over the past decade have increased exponentially,” he told The Nightly. “He leaves on a high.”

Criticism

Some lawyers and business leaders feel ASIC became too focused on generating publicity rather than helping companies become more innovative.

One ASIC campaign pursued companies that exaggerate their environmental credentials, known as greenwashing, secured $30 million in penalties, including a big fine against a superannuation fund that invested in casino operator SkyCity Entertainment and coal miner Whitehaven.

“ASIC has turned into a consumer-law focussed organisation and not on the big picture issues needed to have the settings in place to have the country innovate and grow,” a top corporate barrister said Friday. “They shouldn’t pursue companies for puffery ads.”

The choice of his successor will influence whether the approach continues. The business community hopes Mr Chalmers choses a new chair who has worked for large companies rather than the public service.

The shadow minister for productivity and deregulation, Andrew Bragg, declined to comment on Mr Longo’s performance. He complained Mr Chalmers had not responded to a parliamentary investigation into the victims of financial crimes who sought help from ASIC.

“The structure and culture of the organisation is broken,” Senator Bragg said. “As for whom runs it, I don’t think it matters as much.”: