The Treasurer’s Penalties for White Collar Crime
On Wednesday Treasurer Josh Frydenberg announced the government has introduced legislation into Parliament to strengthen criminal and civil penalties for corporate and financial sector misconduct.
Criminal penalties are set to double, from five years to 10 years, in some cases. Civil penalties are due to increase by more than tenfold for corporations and more than fivefold for individuals.
Image Source: William Murphy
For example, if a court currently found 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.
If the breach occurred under the new laws, however, the court could impose a penalty of up to $1.26 million for each offence.
In other words, if the corporation is found guilty of making false or misleading statements 25 times, they could face a maximum penalty of $31.5 million.
The legislation introduced by the Government will also expand the range of contraventions subject to civil penalties as well as give the courts the power to seek additional remedies to strip wrongdoers of profits illegally obtained or losses avoided.
For example, if a court currently found a corporation had 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 licensing action.
If the breach occurred under the new laws, however, depending on the size of the corporation, it could face a maximum penalty up to $210 million.
The legislation is based on recommendations from the Australian Securities and Investments Commission (ASIC) Enforcement Review.
Providing $70.1 million in additional funding to ASIC to bolster its enforcement capabilities;
• appointing a new ASIC Chair and a second Deputy Chair with a focus on enforcement; and • establishing a new one-stop-shop for external dispute resolution.