The Australian Securities and Investment Commission (ASIC) has put directors on notice that they will be held responsible for the accuracy of company announcements and reports through the publication of enforcement statistics.
The corporate regulator released yesterday what it promises will be the first of regular updates on its enforcement activities.
The report reveals ASIC has secured 208 criminal sanctions and 355 ”enforcement outcomes” – including 252 criminal actions – in the six months to December 31, the great majority of which were lower-level cases involving company directors.
However, the report goes beyond company directors and outlines categories of “gatekeepers” against whom ASIC has taken action including financial advisers, responsible entities, credit licensees, market participants, directors, company officers, insolvency practitioners and auditors.
ASIC chairman Greg Medcraft says when these gatekeepers fail to display honesty, use a position of trust for self-advantage or fail to apply due care and skill to advice or decision making, the regulator will act.
“We are committed to tracking down and punishing wrongdoers and deterring further misconduct. No one is beyond the law, and we have the resources to take on the big cases where it is in the public interest to do so,” he said in statement.
“The release of ASIC’s first enforcement report shows the breadth of our enforcement activities and demonstrates the type of poor conduct we are focused on.”
Alfonso Grillo, partner at TressCox lawyers, says the report shows ASIC is being more aggressive.
“Directors and officers need to act in the best interests of shareholders and act in good faith while satisfying their directors obligations,” he says.
“From time to time in the course of my practice I am aware of clients having grievances and raising them with ASIC.
“I think it is a growing trend that ASIC is funded to look at these issues and is doing so.”
Grillo said that in the past lower level matters had escaped the regulator’s attention, but that had changed.
“I think everyone is on notice now, and so they should be.
“It means people will think twice, more so than in the past, about accepting a role as a company director.”
The ASIC figures could not be compared to previous results as this is the first time they have been released.