Corporate crooks set to face tougher penalties under new rules to be revealed by Government
Updated
Dodgy bankers and other corporate criminals could face a maximum 10 years' imprisonment under tough new penalties to be revealed today.
Financial services companies risk maximum fines of $210 million, with their annual turnover potentially stripped by 10 per cent under the new penalties regime.
The ramped-up criminal and civil penalties coincide with astonishing admissions at the financial services royal commission that a subsidiary of Commonwealth Bank, Count Financial, charged advice fees for years after some clients had died.
The new maximum criminal penalty proposed in the regime would be 10 years behind bars for individuals and the greater of a $945,000 fine or three times the benefits gained or loss avoided.
Corporations would face a maximum penalty of $9.45 million, three times the benefits gained or 10 per cent of a company's annual turnover if that was larger, capped at $210 million.
The tougher penalties were not directly related to the royal commission but were timely, given the community shock and disbelief about unethical and, in some cases, unlawful practices by AMP, the Commonwealth Bank and Westpac.
Among the proposed tougher penalties, individuals who provided false or misleading information to the Australian Securities and Investments Commission (ASIC) would face a maximum five-year prison term, up from two years.
Earlier this week, in the wake of revelations AMP charged fees for no service and misled ASIC as many as 20 times, Treasurer Scott Morrison warned of serious penalties including "possible jail time".
Financial Services Minister Kelly O'Dwyer, who pushed back against the need for a royal commission until it was called late last year, said the tougher laws were consistent with the Federal Government's action to crack down on the financial services sector.
"Stronger new penalties for corporate and financial misconduct will ensure that those who do the wrong thing will receive appropriate punishment," Ms O'Dwyer said.
"These reforms represent the most significant increases to the maximum civil penalties, in some instances for more than 20 years.
"They bring Australia's penalties into closer alignment with leading international jurisdictions, and ensure our penalties are a credible deterrent to unacceptable misconduct."
Civil penalties for individuals will be increased from $200,000 to $1.05 million or three times the benefit gained or loss avoided.
For corporations, maximum penalties under the Corporations Act increase from $1 million to the greater of $10.5 million, three times the benefit or loss or 10 per cent of a company's annual turnover.
Under the proposal, ASIC would be given greater search warrant powers and access to telecommunications intercept material to prosecute serious offences.
The tougher penalties are a response to an enforcement review taskforce undertaken by ASIC after David Murray's financial system inquiry in 2013.
The Federal Government is agreeing to all 50 of the taskforce recommendations while implementing 30 of them.
The remainder will be considered along with the royal commission's final report which is scheduled to be presented to the Government by February 1.
The proposed changes will require consultation and an amendment to the Corporations Act later this year.
Follow Peter Ryan on Twitter @Peter_F_Ryan
Topics: business-economics-and-finance, industry, banking, royal-commissions, law-crime-and-justice, government-and-politics, laws, federal-government, australia
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