Labor is facing renewed pressure over its handling of the $1.2 billion First Guardian and Shield collapse, after a Senate grilling of ASIC revealed key regulatory failures. Shadow Assistant Treasurer Pat Conaghan says Labor is desperate to shift blame, while regulatory cracks and years of government inaction are coming into full view. 
 
“On Thursday, we saw ASIC Chair Joe Longo forced to remind Labor Senators that Australia is governed by the rule of law,” said Conaghan. 
 
Longo rebuked Senator Deborah O’Neill’s sweeping attacks on the advice industry, affirming that most financial advisers act ethically, and urging O’Neill not to “demonise all advisers.” Longo and Deputy Chair Sarah Court said the failures of First Guardian and Shield stem from a minority of operators exploiting legal loopholes, and that the broader advice industry is not to blame. 
 
The collapse of the First Guardian and Shield investment schemes has left more than 12,000 Australians facing life-altering losses in their retirement savings. The cases have also put a spotlight on aggressive online and call-centre-based hawking of financial products – and loopholes in Australia’s laws. 
 
Under questioning from Senator Jane Hume, ASIC confirmed there are longstanding deficiencies in Australia’s anti-hawking laws and the managed investment scheme framework – and that it has been raising these concerns with Treasury for years. Labor committed to reviewing the scheme framework in the 2022–23 Budget, but in a bizarre move buried their own review without releasing any findings. 
 
“Labor knew about these regulatory gaps,” Conaghan said. “Now they’re scrambling, trying to pin this mess on anyone else to cover their own inaction.” 
 
The political temperature rose even higher today with news that ASIC Chair Joe Longo will not seek reappointment – just 24 hours after confronting Labor senators in committee. 
 
“It’s clear from their aggressive questioning Labor already knew Longo wasn’t going to seek another term,” Conaghan added. “Labor is clearly trying to find anyone or anything to put the blame on because they know they’re exposed. They’ve sat on reviews, ignored warnings and failed to act.” 
 
“Labor can’t run forever. Smearing advisers won’t fix broken laws. We need targeted action against fraudsters, their business models, and the loopholes they exploit. But on Thursday, we saw the same old Labor, and I fear all they’ll offer is more ideologically driven red tape that hurts legitimate businesses while doing nothing to protect consumers.”