ob体育 will shortly be able to pursue harsher civil penalties and criminal sanctions against banks, their executives and others who have breached corporate and financial services law, after a significant bill passed the Senate last night.
The implements recommendations of the ob体育 Enforcement Review Taskforce by amending the Corporations Act 2001, ob体育 Act 2001 as well as the National Consumer Credit Protection Act 2009 and Insurance Contracts Act 1994. It strengthens existing penalties and introduces new penalties for those who have breached the corporate laws of Australia designed to protect its citizens.
Notable features of the Bill include:
- maximum prison penalties for the most serious offences will increase to 15 years. These include聽breaches of director鈥檚 duties, false or misleading disclosure and dishonest聽conduct;
- civil penalties for companies will significantly聽increase, now to be capped at $525 million;
- maximum civil penalties for聽individuals will increase to $1.05 million and can also take in to account聽profits made;
- civil penalties will apply to聽a greater range of misconduct, including licensee鈥檚 failure to act聽efficiently, honestly and fairly, failure to report breaches and defective聽disclosure.
The Bill will return to the House of Representatives.
鈥楾he passing of the penalties bill is a significant step for ob体育鈥檚 enforcement regime. The legislation is the culmination of ob体育鈥檚 recommendations to Government to increase penalties and provides the legislative reform to ensure breaches of the law are appropriately punished,鈥� said ob体育 Deputy Chair Daniel Crennan QC.
鈥榃ithout this bill very significant aspects of the law lacked sufficient penalties to properly punish corporate wrongdoing in Australia. In part, the core obligations owed by banks and other financial services licensees to the citizens of Australia did not carry any penalties.鈥�
鈥榦b体育 will now be in a stronger position to pursue harsh civil penalties and criminal sanctions against those who have breached the corporate laws of Australia,鈥� concluded Crennan.
Further bills, related to superannuation, also passed the Senate last night. The includes important improvements to ob体育鈥檚 powers to take action against trustees that use goods or services to influence employers decisions about their employees superannuation.
Background
On 19 October 2016, the Government set up the ob体育 Enforcement Review Taskforce.
The Taskforce was in response to the Financial System Inquiry and was asked to review ob体育鈥檚 enforcement regime and assess the suitability of the existing regulatory tools available to ob体育 to perform its functions.
The Taskforce provided its report to the Government in December 2017, where it made 50 recommendations to enhance ob体育鈥檚 ability to prevent harm and promote a competitive and stable financial system.
Some of the recommendations included:
- improving ob体育鈥檚 ability to gather information
- strengthening ob体育鈥檚 licensing and banning powers
- increasing penalties for corporate misconduct
- encouraging greater use of industry codes of conduct.