* Fines in Australia rarely over A$1 mln, well below UK &
* Tough penalties to encourage better market behaviour
* Any changes not seen before 2015
By Cecile Lefort
SYDNEY, April 9 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
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)