ASIC will soon be able to pursue harsher penalties against banks, executives and other in breaches of financial services laws, after a significant bill was passed by both houses. Partner, Andrea Beatty and Law Graduate, Danielle Bonanno review the proposed changes to ASIC’s power.
ASIC will soon have the authority to pursue harsher civil and criminal penalties against banks, executives and others in breach of financial services laws, after a significant bill was passed by both Houses. The Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2018 (Treasury Laws Amendment Act) enacts the recommendations of the ASIC Enforcement Review Taskforce.
The Treasury Laws Amendment Act aims to strengthen existing corporate laws as well as introduce new penalties for those in breach. Significant features of the Act include an increase of maximum prison penalty to 15 years for things such as breach of directors duties, false or misleading disclosure and dishonest conduct. Civil penalties will be increased to a maximum of $525 million for companies and $1.05 million for individuals. Civil penalties will now also account for a wider range of misconduct, including licensees’ failure to act efficiently, honestly and fairly and the failure to report breaches and defective disclosures.
The Act is expected to place ASIC in a better position to pursue more adequate remedies against those in breach of Australia’s corporate laws, especially in relation to the outcomes of the Banking Royal Commission.
The passing of the Treasury Laws Amendment Bill is likely to be the catalyst for ASIC to increase the amount of referrals to the Commonwealth Director of Public Prosecutions for criminal prosecutions.