Corporate Probes: Profit or Pretend?

G’day.

Welcome to Point Blank. You’ve made it to Friday, congrats.

Today’s brief: A new survey highlights lawyers’ dissatisfaction is rising, with nearly 30% of lawyers keen on a new shop and 1/10 wanting out altogether… 

We say gather the team, and go get that morning coffee. ☕️

 💼 Practice Points

• ASIC has flagged major governance gaps in the use of AI across Australia’s financial sector, urging firms to strengthen their AI frameworks. The regulator is pushing for a closer look at the ethical implications of AI and better risk management to tackle issues like algorithmic bias.

• The Australian Parliamentary Joint Committee on Intelligence and Security is reviewing the new cybersecurity legislation. While the intentions behind the legislation are good, there are two major concerns:

  • The bills encourage companies to share info with the government during cyber incidents, but the proposed "limited use" provisions don't cover criminal proceedings and lack the safe harbour protections—meaning trust between businesses and the government could take a hit.

  • It's unclear how these new obligations will interplay with businesses' existing responsibilities under the Corporations Act and other legislation, leaving companies to wonder which rules they’ll need to follow when the cyber storm hits.

• For those M&A dealers, if a company adds last-minute ASX resolutions under the Listing Rules, ASX won’t review the additional resolutions if they’re shared with shareholders on less than 28 days’ notice—unless the company can provide evidence confirming the resolutions are legally valid. The submission must include advice from the company’s external lawyers.

🏘️ Word on the Street 

• US law firms are set to boom, as Trump’s anticipated deregulation, increased energy production, and more relaxed competition enforcement are likely to spark a rise in demand for legal services.

• Bruce Lehrmann's senior counsel repping him in his appeal hearing has asked to remain anonymous because "he doesn't wish to be trolled or harassed".

• Lawyers’ dissatisfaction is “concerning”, with about 1 in 10 lawyers intending to exit the profession within the year, according to a new ANU and University of Melbourne survey. For those staying in law, the report found that 28.6% of lawyers are considering leaving their current employers within the year. Dissatisfaction with the balance between “reward/effort” was the most common reason for leaving. The “unsustainable and unreasonable” stress and consent pressure was the secondary fuel to ignite the urge to move on.

📢 Talking Points

• First comes the scandals, then comes the lawyers. Corporate investigations are proving lucrative for law firms—HSF has been hired by WiseTech and MinRes, while PwC roped in KWM, Allens, and Linklaters. Legal privilege offers a nice shield in these fraught situations, but are these investigations truly independent? The Fair Work Commission recently called out MinterEllison’s investigation of BHP for lacking rigour, citing the lawyer’s close ties to BHP and even sharing a draft report with them for review and amendment…

• It’s now "virtually certain" that 2024—marked by blistering heatwaves and deadly storms—will be the hottest year on record. Meanwhile, Japan's Mount Fuji has just seen its first snowfall in 130 years, ending the longest snowless stretch ever recorded.

• Richard Boyle, the ATO whistleblower who exposed the ATO’s aggressive tactics to recover tax debts in 2017, is set to stand trial after his bid for whistleblower immunity was rejected by SA Courts and the High Court. Facing 24 charges, including secretly recording conversations, Boyle calls for stronger protections under Australia's whistleblower regime.

• Three people have been charged over the death of former One Direction member Liam Payne, which includes someone close to Payne, a hotel employee and a suspected drug dealer.

• Australia's Ambassador to the US, Kevin Rudd, has come clean about scrubbing his social media of past Trump critiques, aiming for a fresh start in diplomatic ties. Rudd called Trump and ‘traitor’, while Trump thinks Rudd is ‘nasty’. Is it time for the former PM to step aside with all this name-calling?

🏦 The Treasury

🤝 Deal Room

• After the US election, gold stocks have taken a dive, sparking chatter about cash-rich companies scooping up undervalued peers. Potential targets? Ramelius could be eyeing Spartan, while Northern Star may set its sights on De Grey.

• In other election fallout, Trump’s "drill baby drill" policies are set to grease the wheels for US oil and gas projects, ramping up production and likely sparking more M&A activity. Speculation is rife around Australian oil giants like Santos and Woodside, with Woodside’s earlier interest in Santos still hanging in the air.

• Canberra Data Centres, valued at $16bn, has started hunting for an investor to help fund its expansion, calling for bids by Christmas.

🏗 Sector Specific

Diggers

• Cue the courtroom drama. Regis Resources is taking Environment Minister Tanya Plibersek to court over her decision to block the McPhillamy’s Project. Her decision, made under the EPBC Act, was supposed to protect the cultural significance of the Belubula River’s headwaters to the Wiradjuri people. Regis, however, argues there’s no expert evidence backing the ruling.

Fin

• The RBA dropped the hammer on HSBC, revealing the bank was banned from private briefings back in 2019 after it leaked confidential info to a non-attendee. HSBC joins the ranks of Barrenjoey, Westpac, and RBC Capital Markets who all got done for similar breaches.

• NAB’s got bad news for Aussies: we're officially in the “toughest part of the economic cycle”. Arrears are on the rise, accelerating at their fastest pace in five years—now sitting at 1.39% of all lending, up from 1.13% last year, amounting to $10bn in missed payments.

• PwC’s former general counsel is pointing the finger squarely at PwC partners for giving her subpar evidence, which meant her 2017 probe into confidentiality breaches didn’t uncover any issues.

• ANZ’s Chief Executive Officer Shayne Elliott said competition in the mortgage market remained intense as the bank’s profit slips.

Tech

• Optus is down $12m after the ACMA fined them for failing to connect over 2,000 customers to emergency services during a November 2023 outage. The outage left 10m Optus users unable to make calls, send texts, or access the internet—let alone dial triple-0.

• Canada has ordered TikTok to pack up its Canadian operations, citing national security concerns linked to its Chinese parent, ByteDance. While Canadians can still scroll, TikTok plans to challenge the order to court.

• Kerry Stokes, Seven West Media chairman accused the government of failing to regulate foreign streaming platforms and social media giants, which he says are "eating [our] lunch". Stokes pointed out that, unlike these platforms, Seven pays taxes, follows rules, and contributes to the economy, while tech giants like Google and Facebook profit from Aussie content without paying up.

Retail

• The Australian Airports Association is on board with Virgin’s proposed alliance with Qatar, but not without a few caveats. While Qatar Airways would provide planes and crews to help Virgin relaunch long-haul flights, the deal could tie Virgin’s hands on new code-share partnerships—meaning fewer options and less connectivity, particularly for those hoping to fly to Europe via Singapore Airlines.

PS.

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