In the six months between July 1 and December 31, 2021, ASIC closed 139 small business enforcement cases. This included 108 prosecution results and 31 administrative actions. Key findings include: 17.27 ASIC`s decisions on the remedy it will seek after an investigation are relevant not only to the person or entity being subject to enforcement action, but also because of the signal they send to other regulated entities. Trends in ASIC selection may, over time, strengthen or weaken the entire regulatory model. A joint submission from academics from the University of Adelaide`s Faculty of Law argued that the effectiveness of the pyramid model of application may be compromised by the regulator`s excessive reliance on certain regulatory options, while not exercising other options. [39] With respect to enforceable corporations, the claim stated that “it is doubtful whether the individual or the general public is affected by a business as well as by advertising as a result of a dispute.” It has also been argued that the consequences of a breach of an enforceable obligation are “limited”: 17.13 Various concerns have been raised and claims have been made about ASIC`s enforcement record against large companies or well-equipped individuals. It is obvious that there is a perception that ASIC is reluctant to investigate and take action against large companies. It was suggested that: Table 17.2: ASIC Aggregate Enforcement Results by Stakeholder Area, July 1, 2011 to December 31, 2013 Table 17.3: Factors THAT ASIC can consider when deciding on enforcement actions The increase in enforcement procedures has also been accompanied by stronger rhetoric from ASIC leadership. Then-Vice President Daniel Crennan QC said ASIC`s new position meant that “we should be feared and taken very seriously”,6 while President James Shipton pointed out that ASIC`s enforcement work was now “focused on deterrence, public denunciation and punishment for misconduct through litigation.” 7 17.17 ASIC has rejected proposals that it should not accept large companies. Although ASIC noted that this perception exists, ASIC responded by saying that there was a conflicting perception that ASIC only assumes the great end of the city. In a written statement, Medcraft noted that “of course, none of these claims are true” and that ASIC acts “without fear or preference, regardless of the size of the organization.” ASIC presented the results of a breakdown of its enforcement actions by size of business in 2010 to defend its balance sheet (Table 17.4). Since the creation of its own Enforcement Office, ASIC has achieved significant enforcement results in financial services, markets, corporate governance and small businesses.
During the six months between July 1 and July 31. In December 2021, ASIC achieved criminal law enforcement results in a number of misconducts, including credit and pension misconduct, insider trading, auditor misconduct and actions against individuals or businesses, as well as the imposition of administrative remedies for an even wider range of conduct. A significant number of cases are still ongoing, and criminal outcomes for a wider range of misconduct are still possible. The appointment of Joe Longo and Sarah Court could therefore represent an evolution rather than a revolution in ASIC`s enforcement approach, as she once again seeks to strike the right balance between litigation and alternative ways to resolve enforcement issues and becomes familiar with some of the other tools in her enforcement toolkit. However, as ASIC moves away from the universal application of its “why not plead” approach, it is important to remember that recent legislative changes, which have significantly increased civil and criminal penalties and expanded the civil criminal justice system, will mean that law enforcement will continue to be a much bigger issue for businesses than in the past. and that if ASIC takes enforcement action, the consequences for defendants are likely to be significant. 17.12 ASIC`s enforcement priorities and the timeliness and urgency with which ASIC takes enforcement action have been questioned. Anne Lampe compared ASIC`s response to Storm Financial and CFPL to actions taken following a hoax released by Jonathan Moylan in January 2013:[20] Then, in March 2021, ASIC`s new express investigation initiative was launched. This was presented as a “lighter but more effective” approach to enforcement that would be faster, less costly and, to the extent possible, based on cooperation. Karen Chester stressed that instead of targeting “harmless violations of litigation,” ASIC would now seek to “maintain a regulatory level” between fighting “harmful fouls” and rewarding “good performance with nudges, not resentment.” However, she also stressed that the use of express investigations depends on a company`s regular and consistent cooperation with the regulator, and that with a “one-off strike and you go out” policy, any failure to cooperate would mean that asic`s investigation would still continue, “but “slowly and at a higher cost.” 11 17.3 As shown in Table 17.1, ASIC has achieved a high success rate in its litigation. However, the importance and usefulness of such statistics should be taken into account.
As participants in the process subject to increased obligations that reflect community expectations, government agencies should be expected to maintain a high success rate. But what rate should be considered ideal for a regulator and law enforcement agency like ASIC? Statistics on the overall success of litigation can be interpreted and displayed in a contradictory manner. While a low success rate would clearly attract criticism, a very high success rate can also be debatable: it could indicate a risk-averse or even shy agency, which only accepts cases where it is extremely confident that it will win. [2] In this context, litigation success rates also do not provide information on the nature of the cases that are being conducted. For example, statistics do not reveal whether relatively simple violations are being prosecuted or whether the regulator is testing more complex issues. It is also silent on the number of cases (and the profit-loss balance) against large companies versus those against less well-equipped individuals and companies, potentially masking the agency`s propensity or ability to take control of large companies. Regulators can also pursue cases where the law is not tested or unclear, which could also affect their success rate in litigation. These measures are often said to promote investor confidence in the integrity of the securities market. They allow investors to cover past losses caused by corporate misconduct and deter future violations of securities law.
According to the U.S. Supreme Court, they represent “an extremely effective weapon for enforcing” securities laws and are a “necessary complement to the actions of the [Securities Exchange] Commission.” [7] While we may assume that ASIC will be more willing to consider PDUs as an enforcement tool in the future, ASIC will not consider them appropriate in all cases. ASIC reminded regulated companies that PDUs are just one of the enforcement options in its regulatory toolkit, which includes civil penalty procedures, product response orders, and infringement notices, among others. ASIC announced the first enforcement actions it has taken with respect to the Design and Distribution Commitments (DDOs) introduced late last year.
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