ASIC’s penalty structure lags globally

ASIC government and regulation australian securities and investments commission chairman

21 March 2014
| By Kate Cowling |
image
image
expand image

Australia’s corporate regulator is severely limited in the range and severity of penalties it can hand out for wrongdoing - particularly compared to the US and UK, a review has concluded.  

The Australian Securities and Investments Commission (ASIC) could be letting the public down due to its restrictions on prison terms and fines, the regulator’s first penalty structure review in more than a decade has concluded.  

US regulators are able to dole out significantly longer prison terms for similar crimes, the review found, with sentences of up to 20 years for insider trading, market manipulation and fraud.  

In Australia, ASIC can inflict maximum prison terms of up to 10 years, which places it on a par with Canada and Hong Kong.  

However, when it came to individual fines, penalties for crimes like disclosure and unlicensed conduct are capped at $34,000, compared with more than $5 million for Canada and the US, or unlimited in the UK.  

Unlike its global counterparts, ASIC also does not have a disgorgement penalty at its disposal, which would force wrongdoers to pay back penalties earned dishonestly.  

Commenting on the review, ASIC chairman Greg Medcraft said: “The public expects ASIC to take strong action against serious corporate wrongdoers. Those who break the law and cause severe damage should face tough penalties”.  

The findings from the REP 387 review will be presented to the Financial System Inquiry. 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

10 hours ago

Interesting. Would be good to know the details of the StrategyOne deal....

4 days 15 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 2 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 4 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

3 days 13 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

2 days 16 hours ago