The chairman of the corporate regulator warned Australia is a “paradise for white-collar criminals” in a speech yesterday for the Walkley Foundation.
Greg Medcraft, chairman of the Australian Securities and Investments Commission, criticised the soft punishment of corporate offences.
His comments come as white-collar crime has steadily increased over the past two years, with more than half of Australian businesses experiencing some sort of white-collar crime.
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Medcraft said the only realistic response to white-collar crimes in Australia is harsher jail terms and bigger penalties, according to a report in Fairfax.
“The penalties, particularly civil penalties in Australia for white-collar offences, are basically not strong enough, not tough enough. All you’re doing is giving them a slap on the wrist [and] that is not deterring people,” he said.
For white-collar crimes, Medcraft says Australia “is a bit of a paradise.”
Robert Cockerell, a fraud expert at KordaMentha, agrees with Medcraft’s sentiment.
Cockerell, who prior to partnering with KordaMentha was the chief inspector in Victoria Police’s fraud group, told SmartCompany white-collar crimes and fraud in Australia’s financial division is “certainly growing”.
“There’s more motive, there’s increased willingness to gamble. Times are getting tighter and tougher, businesses are getting smaller and this gives more motive to commit these crimes”, he says.
Cockerell offers a way to combat, detect and reduce financial fraud, saying “organisations need to become more proactive, they need clever solutions and they need to engage with the workforce”.
Cockerell says fraud awareness training, as well as whistleblowing within the industry can help to “harmonise” a business and increase protection to stop further fraud cases from occurring.
Medcraft shares an alternative, yet equally critical solution on how to combat white-collar fraud in the financial sector.
“You have to try to put more pressure on the people who are supposed to be monitoring the advisers, so [ASIC’s] strategy is going to be spending a lot more time putting pressure on their own misconduct and breach reporting,” he says.
ASIC’s 2014-15 strategic outlook looks to counter fraud and increase consumer trust in the financial system.
“When investors and financial consumers are victims of wrongdoing, they lose trust and confidence in our financial system. It can also have a long-lasting impact on their financial wellbeing,” the report says.
The regulator wants to “promote investors and financial consumer trust and confidence” as well as “ensure fair, orderly and transparent markets”.