The corporate regulator, Australian Securities and Investments Commission (ASIC) has recently informed about the soon to be effective imposition of harsher civil penalties and criminal sanctions against indulgence in wrongdoing by banks, their executives and others who have violated the corporate and financial services law. The announcement immediately follows the passing of a long-awaited significant bill through the upper house of the bicameral Parliament of Australia, Senate, on the evening of Thursday, February 14th, 2019.
The so-called Treasury Laws Amendment Bill 2018 will implement the recommendations of the ASIC Enforcement Review Taskforce by revising the existing Corporations Act 2001, the National Consumer Credit Protection Act 2009 along with the ASIC Act 2001 and Insurance Contracts Act 1994. The sanctioned arrangement not only alters and strengthens the existing corporate and financial sector penalties but also introduces tougher ones for the culprits involved in breaching of the corporate laws of Australia formulated to maintain civil order, a clean corporate space and protect the faith of the citizens.
These developments have come into effect especially post the appointment of the ASIC's new chief prosecutor in 2018 in line with the initiative to expand the regulatory body?s enforcement activities.
Some of the key and noteworthy attributes of the upcoming Bill prescribe tripling of the maximum prison penalty to 15 years for the profoundly severe offences such as deceptive conduct, breaches of director?s duties and fallacious or misleading disclosure of report/information. Besides, the companies involved in civil crimes will be inflicted with penalties, now significantly increased to $ 525 million while the repercussion of the same crime by individuals will lead to a maximum penalty of $ 1.05 million, also higher than the previous figure, and will also take in to account the profits accumulated.
Moreover, the civil penalties will now be covering a broader range of delinquencies like licensee?s incompetency to act honestly and fairly, or a failure to report infringements and unreliable disclosure. Initially, the bill did not encompass sufficient penalties for minor, yet core obligations owed by the banks and other financial services licensees. The shortcoming now stands addressed and solved as the new regime will come into play.
The new code of conduct to eradicate white-collar crime has been made possible at the backdrop of ASIC?s recommendations and persistent efforts to convince the Government to promulgate stricter legislations stating increased penalties to ensure that defaulters are appropriately punished, thereby setting high standards for the security of the stakeholders and further cement citizen?s faith in the law and order.
The origin of these recent development dates back to October 19th, 2016, when the ASIC Enforcement Review Taskforce was put to work by the Government to assess the effectiveness of the then existing tools. The report comprising 50 recommendations was later submitted in December 2017.
AISC is now in a better position to utilise its powers to address the most extreme corporate offences thereby making it less fascinating for the targeted parties to act upon their criminal intents.
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