A prominent lawyer has argued ASIC should be given the power to issue "no action letters" to those not under formal investigation for wrongdoing following the Royal Commission.
Philip Crutchfield, QC, who previously acted for the corporate watchdog in its bank bill swap rate rigging case against Westpac, NAB and ANZ, as well as acting counsel for AMP at the financial services Royal Commission, has spoken out about the consequences of the reputations that were unfairly trashed.
"One of the problems is that the mere asking of a question, no matter how answered, is taken to suggest wrongdoing or giving of false evidence," Crutchfield said, speaking at the Turnaround Management Associated conference in Melbourne.
"The reporting the next day of a person's name in association with damaging question or submission can have lethal consequences," he said.
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Crutchfield went as far as to compare the banking Royal Commission to the executions of the French Revolution.
"In the financial services Royal Commission, the metaphorical tumbrels of the Jacobin revolution rolled up and own William Street delivering victims to and from the guillotine," he said.
He also lashed out at the "unrealistic" expectations placed on company directors, claiming it deters people from taking on board positions.
Crutchfield is chair of the ASX-listed fintech Zip Co, and warned of the standard set since the Global Financial Crisis.
"Directors now have an obligation that is personal, and cannot be delegated, to understand aspects of the company's business in ways which are simply unrealistic," he said.
Crutchfield believes directors shouldn't double check the work of management and other experts, but rather their contribution should be about strategy, culture and the future direction of a firm.
"To the extent to which it is understood...that the directors are involved in, or have any knowledge of, the day to day activities of the company, it is dangerously wrong," he said.