Greg Medcraft. Photo: Tamara Voninski

IF A good poacher makes a good gamekeeper then the big game of white-collar crime are about to drop like flies. As reported in The Age, Greg Medcraft, the latest chairman of the Australian Securities and Investments Commission, previously ran the securitisation business for French bank Societe Generale in New York.

It was this division of SocGen that is now being pursued in court by the US Federal Housing Agency over allegations it was negligent, did poor due diligence and seriously misled American loan providers Fannie Mae and Freddie Mac.

For those not au fait with securitisation, it is the practice of bundling up debts into a financial product, which is then sold to investors. It was these products that are widely blamed for causing the financial crisis.

But Greg Medcraft is no subsistence poacher swinging a machete and a knobstick. Rather, he is one of the big-game hunters of the credit derivatives market, globally. He even acknowledges this poacher-turned-gamekeeper syndrome as one of his attributes for the role as regulator.

”I understand business, I understand markets – I’m really well equipped for this,” he told a reporter when he got the job at ASIC.

And it should be said that Medcraft could do no worse than his predecessors in any event. When it comes to ASIC and the fight against corporate crime, he is, to borrow the language of the big game, “coming off a low base”.

Yet his poaching credentials are far more impressive than heading up the operation that concocted SocGen’s collateralised debt obligations (CDOs) and so forth.

He was also the co-founder of the American Securitisation Forum, the peak industry body overseeing the proliferation of the very mortgage-backed securities that brought the US and the global economies to their knees.

He was there as chairman from 2005 – for the entirety of the boom until the cusp of the financial crisis he was head of the peak body, lobbying on legislation and other matters involving the $US1 trillion securitisation market.

Displaying quite exquisite timing – he left in February 2008 to return to these shores and soon found a role heading up the Australian Securitisation Forum in March 2008.

In fact, the chairman of ASIC – if the securitisation trade press is any guide – was to step down from the American Securitisation Forum six months before his three-year term expired on June 30, 2008.

ASIC said yesterday that Medcraft stepped down on June 30, 2007, around the time of the credit crisis, as SocGen’s global head of securitisation. But he was not to leave the bank until later that year according to Securitisation News in a story from November 2007.

“While Medcraft no longer goes to the office every day, he remains on SocGen’s payroll for another two months,” said the story.

“He has been without a defined position at the bank since June, when Jean-Francois Despoux took over Medcraft’s nine-year role as global head of a group that underwrites structured products and runs commercial-paper conduits.

“In the meantime, Medcraft was looking for a new job at SocGen. He said his decision to leave came after he was unable to find the right fit. He now plans to return to his native Sydney, where he will take some time off before exploring career prospects in Australia.

“Industry participants who used to work under Medcraft believe he was pushed out for failing to raise SocGen’s profile as a lead underwriter of asset and mortgage-backed bonds in the US. But insiders counter that league-table position wasn’t a priority for SocGen, and that Medcraft turned a decent profit while boosting business dramatically in Europe and Australia.”

If a fine poacher makes a fine gamekeeper, then the Australian regulatory scene has a gamekeeper of Bruce Willisesque Die Hard proportions. Whether Medcraft will live up to that promise is another thing. He faces hurdles in the upper echelons at ASIC, although there are dedicated people toiling beneath.

What is worrying – very much in the mode of ASIC’s own proliferation of exemptions to liquidators and the like – is an exemption from Prime Minister Julia Gillard from the government’s policy promising ”open and merit-based” senior public sector appointments. Medcraft got the job without the role even being advertised.

He’s got both good timing, and good nous.