Frydenberg takes financial services prosecutions federal
The Federal Government will go to the next Federal Election being able to claim that it has cleared the way for the fast-tracking of criminal prosecutions against financial services wrong-doers by expanding and increasing funding for the Federal Court.
The move will mean financial services prosecutions can be pursued in the Federal Court rather than in the over-burdened state courts.
The Treasurer, Josh Frydenberg has confirmed that next month’s Budget will include $35 million to expand the jurisdiction of the Federal Court with the specific aim of dealing with criminal proceedings flowing from recommendations from the Royal Commission and any issues relevantly pursued by the financial services regulators.
He said the funding would support the appointment of two judges, 11 registry and support and the construction of new court facilities for the hearing of criminal proceedings.
“Referrals arising out of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and increased enforcement activity as a result of the Australian Securities and Investments Commission’s (ASIC’s) shift to a ‘why not litigate’ approach are expected to give rise to more criminal prosecutions,” the Treasurer said.
“Criminal prosecutions for misconduct by banks and other financial institutions are currently heard in state courts and hence have to compete with state cases for resources and scheduling,” Frydenberg said.
He said the Royal Commissioner, Kenneth Hayne had emphasised that effective deterrence relied on the timely instigation of proceedings and that, as such, the Coalition Government was going beyond the recommendations in the Final Report to provide additional capacity within the Australian court system to allow matters to be heard and penalties for criminal breaches of the law to be handed out faster.
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
