In a statement issued today, Treasurer Scott Morrison said the reform will represent the “most significant increases in maximum civil penalties in twenty years”.
The government will increase penalties under the Corporations Act to:
- “For individuals: (i) 10 years’ imprisonment; and/or (ii) the larger of $945,000 OR three times the benefits;
- For corporations: (i) the larger of $9.45 million OR (ii) three times benefits OR 10% of annual turnover.
“The Government will expand the range of contraventions subject to civil penalties, and also increase the maximum civil penalty amounts that can be imposed by courts, to the maximum of:
- the greater of $1.05 million (for individuals, from $200,000) and $10.5 million (for corporations, from $1 million); or
- three times the benefit gained or loss avoided; or
- 10% of the annual turnover (for corporations).
“In addition, ASIC will be able to seek additional remedies to strip wrongdoers of profits illegally obtained, or losses avoided from contraventions resulting in civil penalty proceedings.”
ifa rolling coverage of the royal commission financial advice hearings can be followed here: https://www.ifa.com.au/strategy/25404-royal-commission-financial-advice-hearings-live-blog
Pity this wasn’t looked into post GFC when products blew up and rather than the exec’s or the people who designed them, it was the planners who were blamed
I saw Kelly O’Dwyer announcing they would find dishonest and crackdown on :financial advisers”. Yet again she is bagging financial advisers but what the royal commission is showing is that its the execs at the top of the food chain that are the biggest culprits and of course no mention of this from Kelly O’Dwyer. How did she not know this. It was her job to do so. How is it that these same execs have and will no doubt continue to get away with it?
10 years imprisonment for “fees for no service”
it reads “10 years imprisonment with No FEED for no Service”
It is a great advertisement to attract people to our industry.. I often ask why do I bother!
Um…these are not the result of the Royal Commission, no Government moves that fast! They are part of recommendations made by ASIC Enforcement Review Taskforce which reported in Dec 2017.
Announcing them now is just convenient timing for the Govt.
Corp criminal crackdown, so I gather ISA escapes this regime as well and can get away free with rorting the system for years?
It’s time to recall all the big CEO’s past bonus payments and make them pay it back if found guilty. Pretty much every financial CEO and big bono earner has driven this culture of sell selll sell. You can’t have your snout buried at the top of the trough without many other snouts being yelled at to get more more more. Welcome to the financial services industry.
Let’s start by cutting the head off the biggest problem and get rid of the FPA and the AFA who have sat back and done nothing but make it harder and more costly to operate under the guise of caring and compliance for good.
It’s time to cut ourselves from these two mafia heads.
The current laws aren’t enforced so this is virtue signalling and sabre rattling
The RC needs to make an offer to other small and medium AFSL holders to come forward with wrong doings or have ASIC employ extra staff that understand the Financial Planning Process and engage new staff and do some old fashion investigations into these ASFL holders
ASIC were advised of a large credit union that was receiving ongoing fees for service and not doing review etc – they wanted names of the investors to consider acting on the matter when it is a simple process of checking on clients of advisers who left most become orphan clients as the employment criteria is new business income. This credit union sold its financial planning arm.
ASIC causes these issues for lack of action when it requires the hard yards.
Is this 10 years imprisonment for fee for no service?
Yep, has more to do with an election year coming up & trying to take wind out of the socialists sails, than anything else. Still a knee jerk reaction though.
Pity same penalty regime doesn’t apply to corrupt, conflicted, self interested pollies in all parties as well as public servants (not specifically saying ASIC heads, but…)
Better include the use of public money miss used by the government as well… any more helicopter rides anyone?