A review of company laws has called for steeper fines and longer jail terms for corporate crooks amid concerns about weak punishment for white collar criminals.
The Australian Securities and Investments Commission (ASIC) Enforcement Review Taskforce has recommended sanctions for breaking the Corporations Act for companies be nearly tripled from $1 million to more than $2.6 million per breach, or three times the benefit gained (or loss avoided) or 10 per cent annual turnover, whichever penalty is greater.
Civil fines for individuals will increase from $200,000 to $525,000.
The taskforce, which was set up by Financial Services Minister, Kelly O'Dwyer, said the penalties available for some kinds of corporate misdeeds were "inadequate to address the range and severity of misconduct."
In a paper, the taskforce called for maximum terms of imprisonment for criminal offences to increase under the Corporations Act to 10 years in jail, fines of $945,000 or three times the benefits gained for individuals.
The paper recommends companies face criminal fines of $9.45 million, three times benefits gained or 10 per cent annual turnover for criminal offences.
The maximum penalties for breaking the Corporations Act have not increase since the law was enacted in 1993.
"These maximum penalties no longer reflect the seriousness of contraventions and may, some cases, be substantially lower than the potential profits from misconduct," the taskforce said.
Their paper also recommended increases in penalties under the ASIC Act and National Consumer Credit Protection Act.
Calls for disgorgement remedies
In addition, the taskforce called for what is known as "disgorgement remedies" in civil cases.
This allows ASIC to seek to recover the profit gained or loss avoided as a result of the legal breach to make sure individuals do not profit from misconduct.
They also want ASIC to be empowered to deal In 2014, the boss of the corporate regulator, Greg Medcraft, said Australia was a paradise for white collar crime compared to countries like the United States.
In 2014, the boss of the corporate regulator, Greg Medcraft, said Australia was a paradise for white collar crime compared to countries like the United States.
Mr Medcraft has long called for tougher penalties for corporate crooks amid financial scandals at Australia's major companies.
The taskforce included senior representatives from ASIC, the Treasury department, the Attorney General's Department and the Commonwealth Director of Public Prosecutions.
Ms O'Dwyer said the Federal Government was committed to increasing penalties for corporate criminals to protect consumers and investors.
Photo: Financial Services Minister Kelly O'Dwyer set up the taskforce. (ABC News: Marco Catalano)
"The taskforce process will help ensure that ASIC has the right tools to combat corporate and financial sector misconduct and to protect consumers," the minister said.
Submissions on the taskforce's recommendations close mid next month.https://www.abc.net.auAuthor: Sue Lannin