From a Benjamin Hornigold shareholder
This email was sent to Anthony Klan an Australian journalist.
On 30th April 2019 I lodged a complaint with ASIC about blatantly false statements made by ASIC Commissioner Cathie Armour during a Parliamentary Joint Committee on Corporations and Financial Services held on 17th August, 2018. Ms Cathie Armour in her capacity as ASIC Commissioner was asked by the Chair about what happens when regular mum-and-dad investors lose money as a result of director misconduct. Ms Armour responded to the Chair's question with the following:
To be fair, we actually have a very effective class action system in this country which does provide a mechanism for people to commence litigation. Where there are cases of insider trading we are absolutely there taking the action. Similarly with continuous disclosure or misleading or deceptive conduct, we are there taking action. So we will be there if there is that case. I'm not talking about your particular situation, but the prima facie—someone's lost money, but it doesn't mean there's necessarily been a wrong. So we'll generally have a look and see the cause and whether it is the sort of issue that we absolutely need to take action on. You're right; it's really important that investors have real confidence in investing in our markets.
Here is the link to the transcript for your reference:
https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;db=COMMITTEES;id=committees%2Fcommjnt%2F36669972-294a-42a2-9bf5-360ba931dca7%2F0001;query=Id%3A%22committees%2Fcommjnt%2F36669972-294a-42a2-9bf5-360ba931dca7%2F0001%22
In my complaint I also quoted the following excerpt from your excellent article published in The Australian on 22nd February, 2019, as I believe it very accurately and succinctly describes the situation as it really stands:
But more importantly, when it comes to issues that are relatively complicated and involve
smaller companies, ASIC tends to take no action — it argues investors who should get
together for “class actions” in the hope of recovering their losses.
But, like ASIC, class-action litigators find taking on smaller companies — with losses of, say,
$30m — is not worth the trouble. They have to charge substantial fees to cover the heavy cost
of lawyers, and take the risk that they lose and recover nothing. And by the time they take
what they consider to be a fair share of any proceeds in the case of smaller companies, that
share comes in at as much as half or more of any returns.
“The shareholders get upset and attack them, which is a PR nightmare, so they just steer
clear,” Farquhar says.
The financial dynamics of the market have created a perfect storm for financial crime.
Link to the article for your reference:
https://www.theaustralian.com.au/news/inquirer/the-fight-to-win-compensation-for-dupedcondor-blanco-investors/news-story/5a6d20a824c8c207e73bade1301ebb16
The letter I received from ASIC makes reference to a phone call I received from Faranaz Alam on 4th July, 2019. During this phone call it became painfully obvious that Faranaz had not even read the statements of Cathie Armour's I had complained about. In her letter dated 30th July (after supposedly reading the statements made by Ms Cathie Armour), Faranaz still maintains that Ms Armour made her statements in "broad terms" and her statements should not be interpreted in relation to specific circumstances - despite her statement specifically clarifying that ASIC are "there taking action" when there has been wrong-doing. I believe that this response from ASIC is an attempt to sweep a very real problem under the carpet and to cover up the fact that Ms Armour has clearly lied during a Parliamentary Joint Committee.