Tag Archives: Corporations Act 2001

ASIC Enforcement Review – Part 1

Proposed changes to self-reporting of contraventions including new and higher penalties

The Australian Securities and Investments Commission (ASIC) is becoming more proactive, and a recent review proposes expanding the regulator’s powers.

The ASIC Enforcement Review Taskforce has so far released five Position and Consultation Papers, which provide valuable insight into the regulator’s direction and need to strengthen certain enforcement abilities.

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Gore no more – ASIC not required to prove intention in civil penalty proceedings

In an important judgment that will have come as no small relief to ASIC, the Full Federal Court has determined that Chapter 2 of the Commonwealth Criminal Code does not apply to certain civil penalty proceedings. The judgment removes a potentially significant impediment to ASIC’s ability to commence and successfully pursue civil actions (including civil penalty proceedings) for alleged contraventions of the Corporations Act 2001 (Cth).

The Full Court’s decision in Re Whitebox Trading Pty Ltd [2017] FCAFC 100 establishes that ASIC is not required to prove a fault element of intention or recklessness in civil penalty proceedings relating to market manipulation. However, as noted by the Court – the issues, in this case are of ‘fundamental importance’ and the Court’s reasoning has much wider application, arguably extending to all civil penalty proceedings where the same alleged conduct could also lead to criminal prosecution. The decision is significant due to the substantial difficulties ASIC would face in pursuing civil actions if required to not only prove that conduct in breach of the Corporations Act had taken place but also that criminal fault elements set out in section 5.6 of the Criminal Code are established in relation to each physical element of an alleged contravention.

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