Government consults on stiffer penalties for corporate misconduct
Draft legislation to strengthen penalties for corporate and financial sector misconduct has been released by the government for public consultation.
Assistant Treasurer Stuart Robert says the aim is to ensure the Australian Securities and Investments Commission (ASIC) has the powers it needs to take strong action to protect consumers from corporate wrongdoing.
At present, the maximum imprisonment penalties for certain criminal offences in the Corporations Act, ASIC Act and Credit Act do not reflect the seriousness of the misconduct.
However, the proposed changes would double maximum imprisonment penalties and significantly increase financial penalties for some of the most serious ‘white-collar’ criminal offences, bringing Australia’s penalties in closer alignment with leading international jurisdictions.
The financial penalty for individuals for civil contraventions would also be increased more than five‑fold, from $200,000 to $1.05 million, or three times the benefit gained (whichever is greatest) from the contravention.
In addition, contraveners may also be stripped of ill-gotten gains from their illegal activities.
According to Robert, the draft legislation also seeks to introduce criminal offences that sit alongside strict and absolute liability offences and harmonise and expand the infringement notice regime. It also seeks to introduce a new test that applies to all dishonesty offences under the Corporations Act 2001.
In addition, the draft legislation also clarifies that the courts are to give priority to compensating victims over ordering the payment of financial penalties.
Robert says these proposed changes aim to implement key recommendations made in Chapter 7 of the ASIC Enforcement Review Taskforce report.
They are also meant to complement action the government has already taken to clamp down on poor corporate behaviour, such as providing $70.1 million in additional funding to ASIC to boost its enforcement capabilities and establishing a new one stop shop for consumer complaints.
Submissions on the draft legislation close on 23 October 2018 and can be lodged online via the Treasury website.