Speaking as a panelist at a Governance Institute of Australia event in Sydney yesterday, Mr Thangaraj said ASIC spends too much time trying to push jail time for petty crime, which allows other bigger crimes to go unnoticed.
“People have a view that a lot of white collar criminals get away with it, and that is correct,” he said.
“If there’s a limited capacity for resources, rather than spending an enormous amount of time on small cases, you could get an early conviction [through negotiations] on the basis of no jail and then run five other investigations that never would have been run as a consequence.”
Mr Thangaraj said offenders are more likely to cooperate with a negotiated punishment, thus wrapping up the case more quickly.
What deters future misconduct are the “facts of convictions” that ruin reputations, he added.
“[For example,] the effect it has on their career, the reputational outcomes both professionally and socially,” Mr Thangaraj said.
“Deterrence comes not from reading something in the paper about someone who’s been sent to jail but by knowing of someone [who was convicted] within the organisation or in the next building because they don’t want to be in that position.”
ASX managing director Elmer Funke Kupper, also a panelist at the event, agreed with Mr Thangaraj’s suggestions. He added that ASIC should also focus more on the senior management of troubled companies.
“We’re sometimes surprised that companies who pay enormous numbers of fines over a course of five or six years at the end of that still have the same chief executive,” he said.
“At what point do you lose the right to run these organisations?”
ASIC commissioner John Price, who was an audience member, said he also agreed with Mr Thangaraj’s comments about spending too much time on cases. However, he believes jail time should still be sought.
“Even for civil cases, court processes can be quite lengthy. The average time from starting a trial to getting a judgement is measured in years not months,” he said.
“We certainly welcome negotiated settlements with parties. Not everyone does, and surely [they] have different views.
“I think many would argue incarceration is still the most significant deterrent in terms of crime,” he said.
It sounds from Murugan Thangaraj, that there is a lot of white collar crime in Finance.
Gaol time for misconduct as a Director, or an Executive is a must in Corporate Australia.
The toothless tiger, aka ASIC must pick the ball up and run with it and drag these persons into court.
As usual Corporate Australia will not stand and say they did the crime. They will pass the baton onto the next round of executives and they will be left standing, possibly eating a shit sandwich and smiling or sending out letters of apologies and setting up compensations schemes in line with Supreme Court orders.
Kind regards,
Adrian Totolos.
Business Analyst.
ASIC should at least be competent, practice what it preaches and refrain from courting their dinners with “clients” under watch. Ensure privacy is maintained also.
So, what a surprise to find filing systems full of ASIC files of investigative nature including dinners and costs at public auction! Prior to removing their furniture, it would be responsible and professional to remove the contents. As a bystander, I was not amused
The only proper role of law in a civil society is “dispute resolution”. The only instance in which the laws violence should be applied is in the collection of restitution for real victims.
The vast majority of “actions” taken by the market regulator against participants in the financial services industry are not brought by aggrieved individuals but are instead brought by the State for infractions. There’s almost never a “victim” in sight.
These so-called “crimes” are descended from a time when you could be punished for challenging the kings authority. Today, the authority is the State and its agents.
There is no actual market “regulation” taking place. Instead, the regulator operates under a system tied to overtly authoritarian notions about sovereignty. True sovereignty should lie not with kings, the State nor even with the people, but with actual flesh and blood persons (i.e. with individuals).
So long as we continue to allow the monopolisation of the justice and regulatory system by a central authority, we can expect the same waste, intrusion, meddling, inefficiency and lack of justice and a system that paternalises and penalises with little real concern for actual victims when they occasionally arise.
“At what point do you lose the right to run these organisations?”
Great question indeed!
Jail time is no determent – at least they are inside looking out and not able to provide inappropriate advise, if they have been to jail that may stop them gaining employment back in the industry.
I disagree its not a lack of resources but a lack of ability at ASIC that means white collar crime is rampant and increasing. Speaking from personal experience ASIC can only be seen as hopelessly incompetent and again from personal experience would have to say they do more damage than good to the investing public.
Royal commission into Banks and vertical integration as part of enquiry into ASIC