A penny please for every story about the Australian Securities and Investments Commission shutting the gate after ponies decamp – but they’re wrong: ASIC has been caught removing the hinges and waving the nags through.

The Oz lands what should be knock-out blows on ASIC’s failed legalistic culture. Anthony Klan tells the story of ASIC granting an arm of the then-failing, now-failed Asset Loans a fundraising license when the auditors were already ringing the alarm bell. And sounding the siren. And waving red rags.

When KPMG warns that there was “inherent uncertainty” about the Rob Borbidge-chaired Asset Loans’ ability to continue as a going concern, only certifiable idiots would issue a subsidiary, Asset Life, with a licence to go forth and take money from people and offer financial advice. That’s what ASIC did last year.

Asset Loans was a Gold Coast company chaired by a former politician that ran ads in the Sunday rags promising fat double-digit returns – that combination alone should prevent licensing. Klan reports:

The financial problems facing Asset Loans — as well as allegations of improper lending procedures and revelations of the chequered past of its managing director — were widely reported before ASIC granted Asset Life a new financial services licence.

Yet this appalling story of gross stupidity is only a symptom of a deeper malaise — an apparent lack of any willingness by ASIC to be anything more than a dung beetle, carting away some of the mess long after the event and doing nothing to prevent it.

We’re going to see plenty more cases as the fall out from the credit crunch gathers pace. It’s always the developers and their financiers who hit the wall hardest and fastest when money tightens. We’ve been unusual in having some of them — Bridgecorp, Westpoint, ACR et al — go down before it even became hard. So far the failing developers have been mainly small fry, but it’s working its way up the chain e.g. Raptis now in the jaws of various raptors. Oh, another Gold Coast company.

What the Asset Life story and Michael West’s plea for ASIC help for investors in the MFS graveyard and the reports that cricketer Craig McDermott may have “misrepresented his assets” to Bridgecorp and the story about ASIC being warned about ABC Learning’s dodgy accounting and ASIC being warned about the whole Firepower racket and a dozen similar yarns — what they all do is underline the pathetic and not-even-reactive nature of ASIC.

Where’s the urge to get on the front foot, kick down doors, drag scumbags in for questioning, utilise the media the way Al Fels used to at the ACCC, name-and-shame-and-throw-the-legal-book-at-them?

We could do with an Elliot Ness who’s not afraid of making enemies, instead of an overly cautious, legalistic bunch of procedure-followers happily sitting back and making a profit for the federal government out of fees and charges levied on legitimate businesses.

Parking police do more.