On 24 October 2018, the Federal Government introduced the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018 that proposes to strengthen criminal and civil penalties for corporate and financial sector misconduct.
The Bill proposes to double the term of imprisonment from 5 years to 10 years for certain criminal offences. Civil penalties will also be increased 10-fold for corporations and 5-fold for individuals. Currently, if a court finds a corporation guilty of making false or misleading statements in relation to charging fees for no service, a criminal penalty of up to $210,000 could be imposed. Under the proposed amendments, the court will be able to impose a penalty of up to $1.26 million for each offence.
The Bill will also expand the range of actions subject to civil penalties, and give the courts the power to seek additional remedies to strip wrongdoers of profits illegally obtained or losses avoided. Currently, if a court finds that a corporation breached its duty to provide financial services efficiently, honesty and fairly by continuing to deduct insurance premiums from members’ accounts after they have died, there is no penalty apart from taking Australian financial services licensing action. Under the proposed changes, depending on the size of the corporation, it could face a maximum penalty of up to $210 million.