ASIC Enforcement Review Taskforce suggests penalty increases
The Australian Securities and Investments Commission (ASIC) Enforcement Review Taskforce has recommended to expand the range of civil penalty provisions and to increase maximum civil penalty amounts for corporate and financial sector misconduct.
Outlined in its positions paper released on Monday, ‘Strengthening Penalties for Corporate and Financial Sector Misconduct’ the taskforce’s recommendation would increase individual penalties to $525,000 (from $200,000) in the Corporations Act 2001 and $2.625 million (from $1 million) in the National Consumer Credit Protection Act 2009 for corporations, or three times the benefit gained or loss avoided, or 10 per cent annual turnover.
The paper also said: “To broadly align with planned changes to the Australian Consumer Law, penalties in the ASIC Act 2001 would increase from 2,000 penalty units ($420,000) for individuals and 10,000 penalty units ($2.1 million) for corporations to:
- For individuals, 2,500 penalty units ($525,000); and
- For corporations, the greater of: 50,000 penalty units ($10.5 million), three times the benefit gained (or loss avoided) or 10 per cent annual turnover”.
The most serious Corporations Act offences would increase to the highest penalties available under the act – 10 years imprisonment, $945,000, or three times benefits (individuals), and $9.45 million or three times benefits, or 10 per cent annual turnover (corporations).
Maximum fine amounts for other criminal offences would also increase, and be standardised by reference to a formula based on length of available prison term.
It also said the lowest level fines would increase and ASIC would be able to deal with these offences through the existing penalty notice regime as an alternative to prosecution.
The taskforce consisting of senior members of the Treasury, ASIC, the Attorney-General’s Department, and the office of the Commonwealth Director of Public Prosecutions, and representatives from industry bodies, consumer groups, and academia would provide its recommendations to the Government by the end of November 2017.
The Turnbull Government welcomed the position paper’s release and said it was committed to improving outcomes for consumers and investors and a strong penalty framework played a crucial part.
The Minister for Revenue and Financial Services, Kelly O’Dwyer, said: “The taskforce process will help to ensure that ASIC has the right tools to combat corporate and financial sector misconduct and to protect consumers”.
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