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* Fines in Australia rarely over A$1 mln, well below UK & U.S.
* Tough penalties to encourage better market behaviour
* Any changes not seen before 2015
By Cecile Lefort
SYDNEY, April 9 (Reuters) - Australia's financial regulator wants the penalties for corporate misconduct to be substantially increased to act as a greater deterrent against crime and bring the country in line with other jurisdictions.
In a review of corporate penalties, the Australian Securities and Investments Commission (ASIC) highlighted a substantial gap between Australia and those in Canada, Britain, Hong Kong and the United States.
"Those who break the law and cause severe damage should face tough penalties," said Greg Medcraft, ASIC chairman. "It will make them and others think twice about breaking the law."
Fines in Australia rarely exceed A$1 million ($930,000) and are well below comparative amounts in countries such as the United States and Britain, said Luke Hastings, a Sydney-based partner at law firm Herbert Smith Freehills.
"ASIC is saying they don't have a big enough stick to pose a credible deterrent when compared with their counterparts in other jurisdictions," Hastings said.
The regulator noted Australia particularly lags on insider trading. For example, there is no provision for disgorgement, where the court orders the repayment of profits made from the illegal activity.
In the United States, disgorgement orders brought in US$1.8 billion annually in the past four years, more than the amount of penalties levied, according to the report.
And in Hong Kong and Britain there are no limits on civil and administrative penalties that individuals face for insider trading, whereas the civil penalty in Australia is capped at A$200,000, the report noted.
Any changes to the penalties, which would require government backing, are not expected to be passed into law before 2015. ($1 = A$1.0712) (Reporting by Cecile Lefort; Editing by John Mair)