Corporate crooks to face big fines – and long jail sentences

Australian investors will be better protected against corporate crime, under tough new laws that the Federal government will introduce later this year.

The Financial Services Minister, Chris Bowen, who made the announcement, said corporate crooks will face big fines and longer jail sentences, under new laws.

He said they would  will be easier to catch, too,  because corporate crime prosecutors will get new powers to listen to their private telephone conversations and intercept their emails.

Mr Bowen was blunt, when he was asked if corporate crime is  a serious problem in Australia.

He said the Australian Securities and Investments Commission, which prosecutes this kind of crime, had alerted him to a “noticeable trend.”

That was “…often an increase in a firm share price before market sensitive announcements are made.”

Mr Bowen, though, refused to comment directly on high profile cases, that are still before Australian courts.

He said the new penalties, which include up to ten years’ jail would be among the toughest in the world.

Mr Bowen said, too, that they would compare well with those in the United States.

He also said the Australian Securities and Investments Commission, which prosecutes these offenders, would be given access to telephone and other electronic interception powers.

“These changes will ensure that ASIC is properly equipped to investigate and prosecute serious corporate misconduct, ” Mr Bowen said.

This kind of misconduct had the potential to cause significant harm to the economy and investors, Mr Bowen added.

At present, fines for individuals, who indulge in this kind of cheating, are limited to $22,000.

That will rise to eikther $500,000, or three times the amount at stake in the particular crime.

“Whichever is the greater,” Mr Bowen said.

The new maximum for corporate offenders will be $5 million, or three times the amount at stake in the particular crime.

A penalty of 10 per cent of the offending corporation’s annual turnover will also be available.

“To ensure compliance and increase deterrence, the maximum term of imprisonment for these offences will be increased from five to 10 years,” Mr Bowen said.

At present, the Telecommunications (Interception and Access) Act restricts the use of telephone and other interception techniques to investigations of “serious offences.”

Mr Bowen said that law would be changed, to class market crimes and insider trading as “serious offences.

“This will enable ASIC to obtain direct evident of inside information, such as the content of conversations, rather than simply relying on circumstantial evidence, such as the mere existence of suspect telephone conversations, Mr Bowen said.

He said the government would bring the new laws into effect later this year.