The corporate regulator will incentivise participants in financial services legal breaches to dob in others by offering immunity from prosecution.
Under ASIC’s new immunity policy, an individual who has worked with other criminals to manipulate the market or commit insider trading will be able to seek immunity from both civil and criminal proceedings – if they co-operate.
“ASIC continues to develop and implement new tools to combat and detect misconduct. The immunity policy enhances ASIC’s ability to identify and take enforcement action against complex markets and financial services contraventions,” said ASIC commissioner Sean Hughes.
The new policy is “first come, first served” – only the first individual to disclose misconduct will be eligible for immunity, but they won’t get it if they’ve coerced anybody else into participating in misconduct or applied after ASIC has already launched an investigation.
It will also only apply solely for contraventions of part 7.10 of the Corporations Act – “the most serious, complex and difficult-to-detect contraventions in financial markets” – which carries penalties of up to 15 years in prison or fines of almost $1 million or three times the value of the benefit obtained from the contravention.
“This policy is based on a recognition that it may be in the public interest to provide an incentive to individuals who have combined with others to break the law, to reveal misconduct that may otherwise have remained undiscovered,” ASIC said.
Applications for immunity will also only be available to individuals, not corporations, and ASIC will not provide immunity against administrative actions (i.e. disqualification from providing financial advice or managing a corporation) or compensation actions.
“Given the important protective function of administrative actions, we will not provide immunity to an individual under this policy from any administrative action. In accordance with our cooperation policy, we will take into account any cooperation provided by an individual in determining whether to take administrative action against the individual,” ASIC said.
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