The Federal Government has announced it will introduce a new sentencing regime for corporate crime, amending the Corporations Act 2001 to increase both civil and criminal penalties. This arises from an enforcement review taskforce undertaken by ASIC, of which the government has agreed to all 50 of the report’s recommendations.

In the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the proposal has been widely supported. The Banking Association’s chief executive Anna Bligh described the reform as “vital to tackling criminal and unacceptable behaviour by individuals and corporations.” Financial Services Minister Kelly O’Dwyer said such reforms would align us with leading international jurisdictions, describing the proposal as the most significant increase in 20 years.

The reform will see the maximum criminal penalties increase to:

  • For individuals –10 years imprisonment and the greater of a $945,000 fine or three times the benefits gained or loss avoided.
  • For corporations –$9.45 million or three times the benefits gained or 10 per cent of a company’s annual turnover if that was larger, capped at $210 million.

The maximum civil penalties will be increased:

  • For individuals – from $200,000 to $1.05 million or three times the benefit gained or loss avoided.
  • For corporations – 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.

The amendments will also allow ASIC to issue infringement notices for a wider range of financial and investment services as well as grant ASIC greater search warrant powers to assist in prosecuting offences. These powers are in addition to the already extensive coercive powers that can compel interviews as part of an investigation. The proposed reforms will be the subject of consultation later this year.

Allegations of corporate criminal activity, against individuals or companies, can cause severe reputational damage, convictions, large fines and/or terms of imprisonment. Early intervention by an experienced criminal law firm specialising in corporate crime is essential.

For proactive advice about corporate crime, contact Robertson O’Gorman Solicitors.