ASIC rejects whistleblower Denise Brailey’s bid for job as Investigator
Anthony Klan The Australian, 15 September 2008, pp. 27-28
DENISE Brailey’s resume is littered with examples of victories she has claimed in her long-running battle against financial fraud and corporate catastrophe. Ms Brailey, of Perth, has been the catalyst behind several government inquiries, was the whistleblower behind the West Australian solicitors’ mortgage brokers scandal and warned of the collapses of Westpoint, Fincorp and others years before they toppled. She has repeatedly drawn the attention of corporate regulator the Australian Securities and Investments Commission to holes in consumer protection laws and approaching financial catastrophes. But she was bitterly disappointed this month to learn her application for a job as an ASIC investigator, with a modest salary of $70,000 a year, had been rejected.
Her application had not even progressed far enough for ASIC’s recruiters to call her referees. “I’ve opened ASIC’s eyes to numerous approaching financial disasters over many years and I would bring an enormous amount of experience to their investigative teams,” Ms Brailey said. “I’ve studied the business and finance sector for the past 10 years to the point where many members of the media consult with me on a wide range of issues because of my knowledge. “ASIC is saying that knowledge is irrelevant.”
Despite Ms Brailey giving ASIC the authority to speak about her application, the corporate regulator has refused to comment on its decision. “I am not in a position to confirm whether she has applied and certainly wouldn’t be making any comment in relation to any application,” ASIC spokeswoman Angela Friend said. Ms Brailey’s referees (Hugh McLernon, executive director of litigation funding giant IMF, and Doug Solomon, prominent Perth lawyer of Solomon Lawyers) said they were disappointed with ASIC’s decision. Mr Solomon represented many of the victims of the West Australian mortgage brokers scandal, often without pay. “Denise would have made an excellent candidate as a very thorough investigator,” he said. “My experience in working with Denise is that she will get in there and fight, which is surely what ASIC must be looking for.
“She led the campaign against property spruikers such as Henry Kaye, she blew the whistle on the mortgage-broking issues and has done a huge amount of work in the interests of consumers in various types of property-related investments.” Mr McLernon also was disappointed with ASIC’s decision. Ms Brailey once worked at IMF as a special projects manager in seeking compensation for 3000 victims of the mortgage broking scandal. “It’s a pity she didn’t get the job,” McLernon says. “She would have given them a real shake up.”
The potential for that shake up may have been what weighed the scales against Ms Brailey. She has been a vocal critic of ASIC’s shortcomings over many years, her calls contributing to major changes such as the overhaul of reporting requirements of the $8 billion debenture and $42 billion mortgage fund industries. “Denise would have been a very good person for ASIC to have — she has an ability to turn over stones that not everybody wants to see turned over,” Mr Solomon said. “Perhaps there is some concern within ASIC she may turn over some stones somebody doesn’t want to see turned over.”
Ms Brailey had worked as a real estate agent in Perth in the 1990s but resigned to establish the Real Estate Consumer Association (which initially operated from her apartment) in response to the huge numbers of people she saw being ripped off by the property industry. RECA worked to expose property spruikers and served as a focal point for investors from across the country who had been burned by shonky operators. Ms Brailey said, in that time, she had close discussions with many ASIC officials, such as former deputy chairman Jeremy Cooper and former head of enforcement Jan Redfern.
“Over many years I have been consulted by people at the highest levels of the commission concerning a range of issues,” she said. In 2005, she provided ASIC with a list of 12 investment companies that had raised billions of dollars from “mum and dad” investors and which she believed were in serious danger of collapse. She dubbed them the “dirty dozen.” Companies on that list included Fincorp, Westpoint, Australian Capital Reserve and Bridgecorp, all of which have subsequently collapsed owing investors hundreds of millions of dollars. Only in the wake of all those collapses has ASIC moved to overhaul disclosure rules in that sector. Her list grew to over 100 companies and close to $100 Billion at risk. ASIC admitted she was "a good source of "intel."
Ms Brailey said many of those investors to approach her at RECA had earlier voiced their concerns with ASIC and were angered by what they saw to be a lack of interest from the corporate regulator. “So many of the people that came to me are just furious at ASIC,” Ms Brailey said. “They see ASIC as just not giving a stuff about their plight and their files being put on a shelf somewhere to rot.”
She said RECA was an organisation consistently underfunded, receiving operating funds from membership fees paid by the financial victims themselves. That lack of funding eventually led to to RECA being disbanded in December 2005 and no organisation has replaced it. Ms Brailey said that although she is able to voluntary help some of those aggrieved investors who continue to contact her, the support she can provide is limited because she is forced to work for a living in other areas and has limited time available.
Because no organisation has taken the place of RECA, burned investors, such as those caught in the Westpoint and Fincorp collapses, have formed “action groups” in a bid to rally awareness of their plight and push for what they see as justice. But a lack of financial and legal experience held by people running those groups has meant they have been far less effectual than RECA was in assisting investors or bringing about change to the way the financial services system is regulated.
Footnote: RECA was disbanded 2008. One year after this article was released: BFCSA (Inc) was formed and once again headed by Ms Brailey who moved to the wheatbelt in WA and continues her work in criminology and white collar crime, as a volunteer. Pushing for changes in Banking behaviour in 2003, she continued to investigate the Banking Sector and calling for 23 Parliamentary Inquiries and a Royal Commission. Her members come from all over Australia.
Denise has also been assisting with regular inquiries from victims of fraudulent mortgage loans in Ireland, Canada, UK, USA and NZ.