This may just have been what the government had in mind when it awarded ASIC greater regulatory power.
Last week, under proposed changes to the Corporations Act, Financial Services, Superannuation and Corporate Law Minister Chris Bowen awarded the corporate regulator greater investigative powers.
The new powers will allow ASIC to increase penalties for market-related offences, with individuals set to face pecuniary penalties of $500,000 or three times the profit made or loss avoided – whichever is greater.
For corporations, the penalty will be the greater of $5 million, three times the profit made or loss avoided, or 10 per cent of the corporation’s annual turnover during the period the breach occurred.
The maximum term of imprisonment for these offences will also increase from five to 10 years.
ASIC’s surveillance powers will also be expanded, with the corporate regulator now able to access material collected by the Australian Federal Police under a court-issued warrant.
Bowen said the changes would ensure “ASIC is properly equipped to investigate and prosecute serious corporate misconduct, which has the potential to cause significant harm to the economy and investors”.
On face value, the decision seems obvious and straightforward – nothing out of the ordinary really.
It is, of course, quite logical for an industry regulator to have its powers beefed up, particularly after a parliamentary inquiry.
However, what does not seem as logical is rewarding a regulator such as ASIC when there are quite a number of question marks over the ability of said regulator.
In the past decade alone, ASIC has been lambasted over its monitoring of Australia’s financial services industry.
Corporate collapses have not only caused embarrassment to the industry, but also ruined careers, retirements and lives.
Westpoint, Fincorp, ACR, Bridgepoint, Storm Financial, Timbercorp, Great Southern are all examples of woe.
Rumours that ASIC was aware, at some stage, of concerns regarding two or more of these firms before they fell continue to circulate.
Though, to be realistic, what’s done is done. The collapses cannot be rectified to the point where all investors secure lost money, distress is eliminated and destroyed lives are returned to their previous state.
Yet surely what needs to be asked is while ASIC ponders its new powers, who will keep a watchful eye on the regulator?
