ASIC's chief prosecutor, Daniel Crennan, has warned that Australia's financial watchdog will be able to undertake harsher civil penalties against banks, their executives and others who breach financial services law under new amendments that have passed the Senate.
In addition to the possibility of a maximum jail terms of 15 years, companies could face a capped fine of A$525m per civil violation, where violations could be three times the benefit gained or ten per cent of annual turnover.
Currently, executives convicted on criminal charges face a maximum of five years' prison and/or a A$42,000 fine, with a fine for corporations of just A$210,000.
If wrongdoers persist in their wrongdoing which has been uncovered in great detail in the royal commission process, if they persist in engaging in this wrongdoing, they will be facing long custodial sentences and very high, crippling civil penalties"
Civil penalties will also apply to a greater range of misconduct, including licensee's failure to act efficiently, honestly and fairly as well as failure to report breaches and defective disclosure.
"The legislation is the culmination of ASIC's recommendations to government to increase penalties and provides the legislative reform to ensure breaches of the law are appropriately punished," Crennan said.
Crennan admitted that aspects of the law lacked sufficient penalties but now that had changed.
"ASIC 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," he added.
"If wrongdoers persist in their wrongdoing which has been uncovered in great detail in the royal commission process, if they persist in engaging in this wrongdoing, they will be facing long custodial sentences and very high, crippling civil penalties."
The Hayne royal commission chastised ASIC's propensity to cut deals and impose lenient penalties on financial services firms, and urged the new ASIC chairman James Shipton to shift to a "why not litigate" culture on corporate misdeeds. Crennan confirmed he would be avoiding special deals with companies.
"Enforceable undertakings will become a less part of our regulatory toolkit," he said.
"As the royal commission recognises, enforceable undertakings do have a place but the volume of enforceable undertakings, if I could put it that way, is likely to diminish significantly."
The amended bill for white-collar offences passed by the Senate needs to be rubber-stamped by the House of Representatives, a formality.