Treasury has published for consultation an ASIC Enforcement Review Paper on Strengthening Penalties for Corporate and Financial Sector Misconduct.
If implemented the effect of the key positions put in the paper would be to expand the range of civil penalty provisions and to increase maximum civil penalty amounts in the Corporations Act 2001 and National Consumer Credit Protection Act 2009 (Credit Act) to:
- for individuals, 2,500 penalty units ($525,000); and
- for corporations, the greater of: 12,500 penalty units ($2.625 million), or three times the benefit gained (or loss avoided) or 10% annual turnover.
To broadly align with planned changes to the Australian Consumer Law, penalties in the Australian Securities and Investments Commission 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% annual turnover.
In addition to increasing civil penalties ASIC would be able to seek disgorgement remedies (removal of benefits illegally obtained or losses avoided) in civil penalty proceedings brought under the Corporations, Credit and ASIC Acts.
Maximum terms of imprisonment would be increased for a range of offences. The most serious Corporations Act offences, given the nature and/or consequences of the offending (many involving dishonesty) will increase to the highest penalties available under the Act; 10 years imprisonment, 4,500 penalty units ($945,000) or 3 times benefits (individuals) and 45,000 penalty units ($9.45 million) or 3 times benefits or 10% annual turnover (corporations).
ASIC would also be able to deal with a wider range of offences through infringement notice regimes.
