“So now we have ended up where members will be paying civil penalties on behalf of trustees?” he said.
There was silence down the line.
“I don’t know how’s that was consistent, sorry Ms Cole, with what you said earlier,” Falinski said, throwing up his hands.
Cole, who broke into nervous laughter, said: “APRA instructed senior counsel and external lawyers in each of these cases – the majority of these cases – to put to the court views that we considered were relevant to the question to the financial interests …”
At this point in the long answer, Falinski interrupted.
With his last opportunity to question APRA in public before what could be a change in government, Falinski wanted to draw attention to what he argues is regulatory inaction while a new law requiring super trustees to cover fines is, in effect, overruled by judges.
“Sorry Ms Cole,” Falinski interrupted, “let me ask you one last question.”
“We know you were talking to the trustees a lot,” he said. “Did anyone at any point, at any time, in any court case go: ‘Hey, should there be someone here making the argument for members?’.”
Cole disagreed with Falinski’s premise. Many “stakeholders” were represented in the talks, she said.
After the hearing finished, Falinski said he believed cash that will be taken from investors’ accounts to cover future and past legal cases could be “used for anything”. South Australia’s Supreme Court in December approved a plan by AustralianSuper to take $36.7 million from investors to cover fines.
“I’m surprised and somewhat flummoxed that they [the regulators] can’t seem to understand the situation they have created,” Falinski said in an interview. “APRA has confirmed today that once the money is out of the fund, they have no authority over any of it.”
To be fair on Cole, she was hired at APRA last July, and most of the finable behaviour occurred before her arrival.
On the other hand, Cole has been promoted by the APRA publicity department as a kind of prudential-supervision celebrity from Britain’s Financial Services Authority.
An in-house interview last year discussed her competitive horseriding, tan labrador, Elgin, and a childhood dream to become prime minister.
“Although that particular role hasn’t eventuated (yet), it’s clear you’ve always aimed high,” the article said.
Maybe a lesson of Thursday’s appearance is that more regulating and less self-promotion would be in the interests of super investors?