ASIC chairman gave ‘abject’ apology for emotional outburst

The government was satisfied when Mr Longo apologised to each individual involved and more broadly at the following week’s meeting, though Treasury was not told about the resignation after the incident.

The Australian Financial Review contacted the senior manager for comment, but the person declined.

Mr Longo told the Financial Review he accepted that he had inappropriately lost his temper.

“Some remarks were intemperate, unfair, and I apologised, and that’s it,” he said. “I take very seriously my own behaviour, I like to hold myself to the highest standard. On those two matters, at that moment, I didn’t do that.

“I did what I could to communicate directly with those who I knew I’d offended unfairly and spoke with them individually and met with them, and [I] offered to meet with anyone who heard my remarks that day.”

Current and former ASIC employees, all of whom wished to remain anonymous because they were not authorised to speak to the media, said the August outburst was emblematic of an emotional leadership style.

Mr Longo disagreed.

“I believe my style is open; it’s honest, it’s high integrity, it’s courageous – courageous – it’s confident, it’s ambitious,” he said. “I try to run, as the accountable authority, one of the most complex regulators in the world.

“I have very high aspirations for ASIC. I think it’s a great institution. And I feel comfortable in my own leadership.”

‘Of course it was emotional’

That’s not to say there aren’t emotional moments; the public apology at the following week’s enforcement committee meeting was one.

“It was very hard. That’s where the courage part comes in. You know how hard it is to sit in front of 100 people? That’s what an abject apology is from a leader. Of course, it was emotional,” he said.

“I was very upset. I was very upset with myself, I was very upset that I had upset other people. I’m just human, of course it was emotional. I make no apology for that.”

The nation’s top watchdog committed to “taking steps” to ensure such an incident didn’t occur again. When asked about specifics, Mr Longo declined to elaborate, saying it was “a matter for me” and personal.

The incident was the subject of an anonymous complaint through ASIC’s Speak Up portal, established in the previous 12 months, though Mr Longo said he apologised before he became aware a complaint had been made.

The ASIC chairman said he asked the senior manager to remain with the regulator, but “couldn’t comment on his reasons for leaving”, suggesting employees left for many reasons that were often “very private”.

In a statement, an ASIC spokeswoman said Mr Longo decided that making an apology was the most appropriate response.

Slow progress

Mr Longo declined to comment on the two matters that raised his ire. However, people at the meeting indicated that one was an investigation into current and former directors of Youpla Group.

It is understood Mr Longo was angry about its progress because he would have to answer questions from politicians and media.

In late 2020, ASIC commenced proceedings in the Federal Court against the group, including a key subsidiary ACBF, formerly known as the Aboriginal Community Benefit Fund, a provider of funeral plans.

It alleged Youpla engaged in misleading and deceptive conduct and made false and misleading representations in offering funeral plans.

In March last year, an external administrator was appointed to Youpla Group and a liquidator was appointed to ACBF, forcing ASIC to seek special leave to progress the matter while the group was in liquidation.

ASIC then sought a record and “very severe” penalty of $7.5m against the funeral insurer for its “deliberate and knowing conduct of preying on vulnerable Aboriginal people” over years of operation.

David Blatt, KC, said the penalty was “very, very significant” because the conduct was at senior levels over a long period, and because its former directors showed a “deliberate and callous intent” to deceive customers.

In December, ASIC commenced further injunctive proceedings to preserve a property part owned by a former director, Bryn Jones, and acknowledged it was investigating directors of the companies.

ASIC restructure

Minutes of the August 18 enforcement meeting obtained under freedom of information showed a matter relating to cryptocurrency Qoin was withdrawn. ASIC later sued BPS Financial for allegedly making false, misleading or deceptive claims about the non-cash payment facility.

A matter against non-bank lender Firstmac was also discussed. ASIC sued Firstmac for alleged breaches of the appropriate marketing obligations. However, it is unclear what the second matter of concern was.

Fixing the speed at which ASIC conducts investigations and enforcement actives is a key focus of an imminent restructuring of the organisation, and the most significant overhaul of the regulator in nearly 15 years.

The overhaul will cut the number of business groups and force the exits of long-serving senior executives. More money will be directed towards filling what Mr Longo called ASIC’s “technology debt”.

The changes are designed to streamline enforcement, cut bureaucracy and empower fast, decisive decision-making.

While praising a hard-working, capable team, Mr Longo said ASIC’s watchdogs were too cautious, risk averse and bureaucratic.