Regulatory Complacency Amidst Vast Technological Change
– Dr. David Millhouse, Founder & Chair, ActiumAI (First published October 2025)
Why is it surprising that Australian retail investors, once again, have allegedly been defrauded of many millions of dollars of their hard-earned superannuation savings?
Australian Fiduciaries, the Falcon Capital, First Guardian Master and Shield Master Funds (and c. 600 others since the Hayne Royal Commission) have been prominently reported in the financial press.
There is nothing new about these events as empirical research has previously uncovered, now globally published by top legal publishers and reported by Chanticleer in the Australian Financial Review ― ‘Hayne’s Legal Reform Challenge’ (afr.com Wednesday 16th January 2019).
What would Shakespeare have made of such a recurring tragedy which financially ruins thousands of Australian lives and homes? His Coriolanus (1608), the tale of the great warrior Coriolanus turned failed political leader is a parable of the failed attempts at law reform of financial services and financial products in Australia ― ‘Before him he carries noise, and behind him he leaves tears’.
That is indeed the legacy of the plethora of Inquiries and Royal Commissions in this sector of the Australian economy. Yes, lots of noise and lots of tears for millions of Australians. But without serious strategic law reform rather than tactical tinkering at the edges, there will be lots more tears.
Tears aplenty for those many local authorities (wholesale investors at law) and their ratepayers invested in Grange Securities financial products on conflicted advice. His Honour Justice Stephen Rares observed (Wingecarribee Shire Council v Lehman Brothers Australia 2012) that ― ‘The cost to the community, business, the parties and their lawyers, and the time for the courts to work out which law applies have no rational or legal justification’ … ‘Those Acts [Corporations Act, Australian Competition and Consumer Act, ASIC Act], that now deal with misleading and deceptive conduct, apply differently depending on distinctions such as whether the alleged misleading conduct is in relation to a “financial product or a financial service”, or “financial services”. Those apparently simple terms are nothing of the sort. A “financial product” is defined in mind-boggling detail in 7 pages of small type while a “financial service” takes another 6 pages to be defined. The ASIC Act only takes about 4 pages to define “financial service”. Obviously, there are differences in what each of these Acts and definitions cover – but why?’
‘Byzantine’ and ‘purgatorial complexity’, or as Dante Alighieri put it in his ‘The Divine Comedy: Inferno’ ― ‘Abandon all hope, ye who enter here’.
I am not the only legal scholar to convey these sentiments, although I am the only scholar in Australia to have internationally published empirical data, summarised below.
Dr Pamela Hanrahan, a leading authority, in ‘Untangling the maze’ (Australian Institute of Company Directors Magazine Directors Counsel, April 2024) noted that the Australian Law Reform Commission was instructed that ‘existing policy settings were not up for renegotiation’. Further, Dr Hanrahan noted ‘judicial descriptions of the legislative framework as “porridge” and a “maze” … poorly designed regulation that drags on innovation and productivity’.
Her conclusion ― ’Unless we rethink the way business regulation is made and overseen, the risk is we will be back here in a decade’.
The empirical evidence
These are the losses incurred by retail and wholesale investors sourced from 199 senior court judgments 1984- 2018. There is a statistically high correlation in the top decile and top quartile samples between related party transactions and egregious behaviours.
If the Federal Government is serious about productivity in the economy, then it MUST address law reform. This lost capital is a serious impediment to the financing of an entrepreneurial economy. Empirical estimates are a loss of 0.46% of nominal GDP (2016-17) or more importantly, 23.14% of nominal GDP growth (Law and Financial Markets Review 13(2-3) 2019 p 175).
These are damning statistics. They stem from the loss of productive capital arising from egregious behaviours facilitated by existing Australian law. The Australian reported this problem ― ‘…all levels of government need to axe red and green tape that is stifling productivity and stalling economic activity and investment’ (Geoff Chambers, The Australian The Nation, August 6 2025 p 5).
How ActiumAI’s Intelligent Enterprise Workflow Automation IEWA) technologies can assist
Law reform is a massive set of tasks. It involves a large number of stakeholders, some of whom accept the status quo.
Some tasks require the application of Robotic Process Automation (RPA). Some require the insightful application of Artificial Intelligence (AI) in various of its manifestations. All require legal veracity not yet provided by existing Large Language Models (LLM’s) of which there are c.250,000.
There is only one AI Agent which can demonstrate legal veracity. This is ActiumAI’s Archimedius AI Agent. It is the only known technology that links Legal Linguistics with Artificial Intelligence. It can read and interpret vast quantities of legal documents quickly including the c.3 million words of the Corporations Act, Corporations Regulations, Legislative Instruments, relevant Accounting Standards and case law. It can then produce what the law could be including, inclusion of primacy of fiduciary obligations within a redesigned legal framework.
For more prosaic tasks ― untangling the web of related parties for instance, ActiumAI can automate that process too. This would immeasurably assist the tasks of the regulators and those charged with remediation for the aggrieved. These ActiumAI Entity Spider Webs (see below) can include related parties internationally.
So what happens in Coriolanus?
The ‘ignorant Plebeians’ removed the erstwhile hero warrior. In Roman times, a democracy, the ‘Plebeians’ voted. Did the ‘Tears’ stop? What was the role of the Tribunes (elected officials)? Please read the play
