Reforms to strengthen penalties for corporate and financial sector misconduct – Draft Legislation

The Government is seeking public comment on draft legislation to strengthen penalties for corporate and financial sector misconduct.

The draft legislation seeks to:

• update the penalties for certain criminal offences in ASIC-administered legislation, including:
  • increasing the maximum imprisonment penalties for certain criminal offences;
  • introducing a formula to calculate financial penalties for criminal offences;
  • removing imprisonment as a penalty and increasing the financial penalties for all strict and absolute liability offences;
• introduce ordinary criminal offences that sit alongside strict and absolute liability offences;
• significantly increase the financial penalties for civil contraventions and  give courts discretion to strip contraveners of their ill-gotten gains in civil penalty proceedings;
• modernise and expand the civil penalty regime by making a wider range of offences subject to civil penalties;
• harmonise and expand the infringement notice regime;
• introduce a new test that applies to all dishonesty offences under the Corporations Act 2001; and
• ensure the courts prioritise compensating victims over ordering the payment of financial penalties.

The reforms implement some of the recommendations of the ASIC Enforcement Review Taskforce. The Taskforce was established to review ASIC’s enforcement regime. The Taskforce provided its recommendations in a report to the Government in December 2017.