Updated
(AAP: Julian Smith)
The boss of the corporate regulator says Australia is
too soft on corporate criminals and increased civil penalties including
more jail terms are needed.
"[In] most countries the penalties are two to three times the amount gained or lost," he told the function.
"Often [in] Australia it's actually worthwhile breaking the law to do the trade. You can't have that."
The corporate watchdog is under fire and accused of not doing enough to crack down on financial planning scandals at the big banks and for being too soft on big business.
But Mr Medcraft rejected accusations that the watchdog is too soft on the big end of town and says that ASIC has lifted its game.
Mr Medcraft told the function, where business journalism finalists for the Walkley Awards were announced, that penalties for corporate crimes are too weak compared to other countries such as the United States.
'Lift fear to suppress greed'
ASIC's boss said corporate criminals most fear going to jail and penalties for breaking financial laws need to reflect that."Frankly it's very important in a globalised market that you have penalties that actually match other jurisdictions or you run the risk that we could potentially be picked off," Mr Medcraft told AM in an interview.
"You've got to lift the fear to suppress greed in the white collar area."
ASIC recommended to the recent Senate inquiry into the regulator and the current Financial System Inquiry that penalties for corporate crimes be increased.
"In many of the cases the penalties are not indexed to inflation, some of them are twenty years old," Mr Medcraft told the ABC.
"If we want investors and issuers in Australia to have confidence and trust in our market then what they want is to make sure that those who intentionally breach the law will be severely dealt with."
Mr Medcraft said tougher criminal penalties for insider trading, including jail sentences of ten years, had reaped results by encouraging more people to confess to the crime.
He said that in the US corporate tax cheats go to jail, but that does not happen in Australia.
Lack of resources
Mr Medcraft said ASIC is hamstrung by a lack of resources. It has lost 200 staff this year because of budget cuts and another 100 will go next year from its 1,500 strong workforce.He argued that ASIC should move to a user pays funding model.
"I think it's important that those that generate the need for the use of our resources should pay for those resources," he said.
"That we have a market priced signal for the use of resources, I think that is a fairer system."
Despite financial planning scandals at the Commonwealth Bank and Macquarie Group, Mr Medcraft said the corporate regulator had just 25 officers to regulate 30,000 financial planners.
"What we are able to do to do is very limited and that's why it's really important that Australians do take care when they deal with a financial adviser," he told AM.
The ASIC boss repeated his calls for financial planners to sit a national exam and be regulated like pilots were under the Civil Aviation Safety Authority.
Mr Medcraft denied that ASIC's prosecution of environmental activist, Jonathan Moylan, for distributing a fake press release which caused the share price of coal company, Whitehaven Coal, to temporarily crash was an easy win.
"We went after him because we actually wanted to make an example of Jonathan Moylan because we don't want people disrupting markets," Mr Medcraft told the function.
"People lost money from what he did. Is that fair?"
In a statement, Finance Minister Mathias Cormann said that ASIC needed to competently enforce the current laws and the Government would toughen penalties for white collar criminals if there was persuasive evidence of a problem.
"I asked Greg Medcraft whether he believed Australia was a paradise for white collar criminals and his direct response to me was a clear and unambiguous 'no'," Mr Cormann said in the statement.
"He indicated to me that his point was that Australia needed to remain vigilant to ensure Australia does not become a paradise for white collar criminals."
abc.net.au 24 Oct 2014
This is essence of law in Australia, as the government is actually a corporation conglomerate, which by no accident supports corporate crime.
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