ASIC’s penalty structure lags globally
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.
AUTHOR
Kate Cowling
Recommended for you
Minister for Financial Services, Stephen Jones, has said he did not expect backlash to changes around advice fee deduction and believes the second tranche will have greater impact, committing to enact it by May 2025.
Financial adviser numbers are “back in black” for the year to date, thanks to 50 new entrants joining the industry over the last four weeks.
An equity partner firm of Count has purchased a Brisbane-based accounting business for nearly $1 million, as Count drives forward its inorganic growth momentum.
Australia’s looming intergenerational wealth transfer remains a crucial opportunity for financial advisers, with 14 per cent of consumers looking to transfer $1 million or more.
