The corporate regulator has roughly halved the number of individuals it has banned or restricted from providing financial services or credit year on year, while ramping up its criminal prosecutions and investigations.
ASIC’s enforcement update for the first half of the year has shown the watchdog removed or restricted 54 people from providing financial services or credit, in contrast to the 103 it hit in the same period last year.
However, criminal proceedings accelerated – with 18 people charged and 233 charges laid, compared with the 10 people and 70 charges in the first half of 2019. Nine individuals received custodial sentences, with five people imprisoned and four received non-custodial sentences.
The regulator’s actions have also led to $12 million in civil penalties being imposed by the courts and four civil penalty cases being commenced, with 23 cases before the courts.
ASIC recorded 54 financial services related results, including 11 criminal and 49 civil financial services cases before the courts, as at 1 July.
The most common matter in the industry’s enforcement litigation (still before the courts) was dishonest conduct and misleading statements, with six respondents implicated in criminal cases and 23 in civil.
Other financial services misconduct had given rise to the highest number of administrative enforcements, at 32.
Results during the half included AMP’s $5.18 million penalty for failing to prevent insurance churn by its advisers and the three-year sentence for former adviser Trevor Martin, for dishonestly obtaining client funds.
ASIC also launched civil proceedings against Colonial First State over alleged misleading and deceptive statements to members of its FirstChoice superannuation fund.
CFS is also facing a separate case involving CBA, over alleged conflicted remuneration paid by the investment company to the big four bank between 2013 to 2019.
Investigations rose year on year, with the regulator commencing 99 during the six months compared with 77 the year before. ASIC completed 62 investigations and litigation actions from January to June.
Meanwhile, 20 individuals were disqualified or removed from directing companies.
ASIC flagged that it recently implemented a set of pandemic-related priorities, including addressing misconduct arising from opportunistic behaviour looking to exploit the environment, such as mis-selling of unsuitable investment products, poor claims handling and egregious governance failures within schemes and super funds.
Its interim corporate plan for 2020 to 2021 also outlined the regulator would be prioritising royal commission referrals and case studies, cases engaging its new powers, misconduct related to super, insurance and auditing, phoenix activity and new types of misconduct, carried out online and with new technology.
But it stated it remains focused on market misconduct and misbehaviour resulting in consumer harm, as well as misconduct by individuals and governance failures, particularly at board or executive level.
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