Proposed changes increase misconduct penalties

Draft legislation to strengthen penalties for financial sector misconduct has been released by the government for public consultation.

The proposed changes would provide the Australian Securities and Investments Commission (ASIC) with the powers it needs for stronger action.

The changes put forward include doubling maximum imprisonment penalties and significantly increasing financial penalties for some of the more serious ‘white-collar’ criminal offences.

The financial penalty for individuals for civil contraventions would also be increased more than five‑fold, from $200,000 to $1.05 million, or three times the benefit gained (whichever is greatest) from the contravention. Contraveners may also be stripped of ill-gotten gains from their illegal activities.

The draft legislation also seeks to:

• introduce criminal offences that sit alongside strict and absolute liability offences;
• harmonise and expand the infringement notice regime; and
• introduce a new test that applies to all dishonesty offences under the Corporations Act 2001.

These proposed changes seek to implement key recommendations of the ASIC Enforcement Review Taskforce and complement action the government has already taken including providing $70.1m in additional funding to ASIC to bolster its enforcement capabilities and establishing a new one stop shop for consumer complaints.

The government has said it is committed to ensuring ASIC is properly armed to effectively deter, prosecute and punish those who do the wrong thing, to improve community confidence and outcomes for consumers and investors in the financial services and corporate sectors.

Stakeholders are invited to lodge submissions online via the Treasury website. Submissions opened today, 26 September 2018 and will close on 23 October 2018.