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OFFICE OF ENFORCEMENT
WHAT SHOULD BUSINESSES BE DOING IN 2019?
Following the release of the Final Report of the Financial Services Royal Commission, ASIC has announced a new Office of Enforcement. The Office of Enforcement is responsible for carrying out ASIC’s key enforcement activities. The enforcement function is now separate from ASIC’s regulatory teams. After ASIC was heavily criticised in the Final Report for not commencing litigation against wrongdoers as often as necessary to deter such conduct, the approach of the Office of Enforcement is stated to be “Why Not Litigate?”. Thirteen matters were referred to ASIC by the Financial Services Royal Commission for prosecution and these are being managed by the Office of Enforcement. The Office is also investigating a number of other matters. There is an expectation that with the new focus on enforcement and the introduction of increased penalties for breaches of general obligations by financial services licence holders, there will be a significant increase in the volume of litigation against corporate Australia. There had already been an uptick in criminal cases brought against individuals and corporations and this is certainly a trend that is likely to continue.
Business leaders should stay alert to changes in this space as the Government has signalled it intends to enhance the legislation in this area to facilitate prosecutions of corporate offences. It is anticipated that the Commonwealth Director of Public Prosecutions will use this additional regulatory firepower to pursue enforcement outcomes. Business leaders should review the corporate culture and compliance policies and frameworks of their business. ASIC also has a clear mandate to pursue corporate criminal conduct through its Office of Enforcement. Businesses need to be mindful of the significant penalties that now apply to a range of corporations law offences and that the community expectation is that wrongdoers will be punished, both at the corporate and individual levels. The risk of prosecution reinforces the importance of managing legal and regulatory risk within an organisation and ensuring that any wrongdoing is detected early and where necessary, that appropriate reporting and remediation is undertaken.
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