New powers for ASIC boost fines, jail time for white collar crime
As a result of new powers, ASIC will be able to pursue significantly larger fines and jail time for businesses and their leaders across the financial sector.
The Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018 implements recommendations of the ASIC Enforcement Review Taskforce by amending the Corporations Act 2001, ASIC Act 2001 as well as the National Consumer Credit Protection Act 2009 and Insurance Contracts Act 1994. The Act has now passed and is awaiting assent.
ASIC’s new powers include:
- Maximum prison penalties for the most serious offences will increase to 15 years. These include breaches of director’s duties, false or misleading disclosure and dishonest conduct;
- civil penalties for companies will significantly increase, now to be capped at $525 million;
- maximum civil penalties for individuals will increase to $1.05 million and can also take into account profits made;
- Civil penalties will apply to a greater range of misconduct, including licensee’s failure to act efficiently, honestly and fairly, failure to report breaches and defective disclosure.
Currently, executives convicted on criminal charges face a maximum of five years' prison and/or a $42,000 fine, with a fine for corporations of just $210,000.
The new maximum fines are also now applicable per offence. ASIC Deputy Chair Daniel Crennan QC said these tougher penalties are "game-changing”.
"If you're dealing with a large institution, such as a bank, for example, they may contravene the law 10,000 times — so this gets into astronomical figures," he told the ABC.
The new penalties will not be able to be applied retrospectively, such as to address historic crimes unveiled by the Royal Commission into Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.