ASIC chairman Greg Medcraft thinks companies should also be subject to civil penalties when their culture encourages bad conduct. Photo: Alex Ellinghausen
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Mr Medcraft also called for a review of the legal framework in Australia so that the criminal laws allowing ASIC to pursue a company over its culture are extended to include civil penalties – in effect creating a new sanction in ASIC's act.
His comments came as some of Australia's largest financial institutions including the Macquarie Bank are subject to an enforceable undertaking to clean up their financial planning departments in a wave of financial planner scandals. ASIC has also amended the licence conditions of the Commonwealth Bank's financial planning arms. It is also investigating the National Australia Bank.
Presenting at the Senate Economics Legislation Committee, Mr Medcraft said ASIC was looking to pursue charges against at least one organisation for breaches relating to the culture of the group.
Mr Medcraft said more companies should be aware of section 12.2 of the Commonwealth Criminal Code: "It is that a company can be held responsible as an accessory for breach of certain Commonwealth laws by its employees if the company's culture encouraged or tolerated the breach," he said, describing the law.
"It's a provision we need to think about more and it's one that quite frankly we are [looking at]," he added.
"That when an employee breaches a law ASIC administers [and] the culture is responsible, then not just the employee ... but also the officers and the company should be held responsible."
He said the Commonwealth Director of Public Prosecutions and ASIC were already considering pursuing at least one Australian company for a criminal breach of Section 12.2. He did not name the company.
Yet at the moment, ASIC was hamstrung in pursuing some companies because the burden of proof needed to successfully lay a criminal charge compared to a civil charge was much higher, Mr Medcraft said.
"We think the same offence should be able to be actioned by ASIC in the civil courts, just like we can do now for other market misconduct.
"We think the officer and the firm should be subject to civil penalties and administrative sanctions, as accessories."
Mr Medcraft denied that he said there was a housing bubble at a conference this week, saying his concerns related to responsible lending practices and keeping a lid on house-price-to-income ratios.
"The last thing any banking institution wants is defaults," Mr Medcraft said.
theage.com.au 3 Jun 2015
As an example in Victoria, there is a monumental fraud and collusion between Victoria Police, Civic Compliance Victoria and VicRoads against Victorian motorists to the tune of hundreds of millions of dollars annually.
We have ALL the evidence of this monumental fraud, but lets see if the corporate media will publish this info.