Only half of ASIC referrals result in convictions in FY22-23

Only half of cases referred by ASIC to the Commonwealth Director of Public Prosecutions (CDPP) resulted in convictions in the last financial year. 

According to data supplied by the CDPP to the Senate Standing Committee on Economics’ ASIC inquiry, it showed there were 41 referrals made by ASIC during the 2022–23 financial year. This was down from 70 in the year prior and a peak of 86 in the 2018–19 financial year. 

Between 2018 and 2022, the number of referrals ranged between 70 and 82, but dropped dramatically in 2022–23. 

Subsequent data from a question on notice this week showed the conviction rate for cases referred by ASIC fell significantly from the majority of cases being convicted.

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In 2019–20 and 2021–22, both years saw conviction rates of 100 per cent. These years had seen 51 and 46 prosecutions instituted respectively.

However, in the 2022–23 financial year, 50 per cent of cases resulted in conviction, which is the lowest rate for the five years of data supplied to the inquiry.

There had been eight prosecutions instituted, which represented 19.5 per cent of total referrals – one was proven and one was acquitted.

The CDPP stated the conviction rate is calculated by taking the number of defendants convicted as a percentage of defendants convicted or acquitted. This includes any finding of guilt by jury or tribunal of fact, including but not limited to where a conviction is recorded. 

Appearing before the inquiry last week, financial adviser Peter Alvarez of Navigate Wealth in Sydney said advisers should be excluded from covering enforcement action in their ASIC levy. 

“Enforcement costs should be cut off of the levy and be paid by the government. I’m happy to pay something towards the operation of ASIC but not for enforcement. 

“If the court gives bad apples jail time and dissuades other bad apples, then we won’t have any more bad apples. But the sentencing is too lenient, so it continues to happen. We need solid jail time for each and every offender.”

The inquiry is investigating ASIC’s capacity and capability to undertake proportionate investigation and enforcement action arising from reports of alleged misconduct.

Among questions to investigate include the potential for dispute resolution and compensation schemes to distort efficient market outcomes and regulatory action, and the balance in policy settings that deliver an efficient market but also effectively deter poor behaviour.