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Turnbull Government crackdown on corporate misconduct increases jail terms, jacks up fines

SHONKY bankers and insurers face being locked up for a decade and smashed with $10 million fines under harsh new punishments for corporate misconduct.

Treasurer warns of jail time for banking executives

SHONKY bankers and insurers face being locked up for a decade and smashed with $10 million fines under harsh new punishments for corporate misconduct.

An overhaul of criminal and civil penalties will dramatically increase jail terms, increase fines by as much as 900 per cent and claw back “illegal” profits from corporate cowboys.

The crackdown, to be revealed today, will turn up the heat on companies whose practices have been exposed by the royal commission into banking and financial services.

The commission was told the Commonwealth Bank slugged dead people with fees for advice, in one case for a decade, after AMP was caught out systematically charging customers for services that weren’t provided.

Financial Services Minister Kelly O’Dwyer said the government’s changes to criminal and civil penalties were the biggest in more than two decades and would protect consumers from corporate and financial misconduct.

“It will ensure that those who do the wrong thing will receive the appropriate punishment,” Ms O’Dwyer said.

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Treasurer Scott Morrison and Financial Services Minister Kelly O’Dwyer. Picture: AAP Image/Mick Tsikas
Treasurer Scott Morrison and Financial Services Minister Kelly O’Dwyer. Picture: AAP Image/Mick Tsikas

Under the reforms, individuals found guilty of 19 different criminal offences — including corporate fraud, dishonest conduct and knowingly providing defective disclosure documents to consumers  — will now face 10 years in jail and fines of $945,000.

The corporate watchdog’s investigative units will also be authorised to access phone intercepts and be given stronger search warrant powers.

Fines for companies caught on those offences would total the largest amount out of $9.45 million, three times the benefit gained or 10 per cent of their annual turnover, paving the way for even bigger penalties on corporate behemoths like the big four banks.

Jail terms will also be significantly increased for another 43 offences, such as giving false information to the corporate watchdog, managing a corporation while disqualified and failing to give a required disclosure document.

Treasurer Scott Morrison said the government was committed to ensuring there was a “credible deterrent to unacceptable misconduct”.

The government will give a string of new powers to the Australian Securities and Investments Commission, which will now be able to ban individuals from working in any position in a financial services company if they are found to be unfit, improper or incompetent.

The watchdog will also be given greater authority to cancel or revoke financial services and credit licences.

The reforms, which are the result of a special taskforce on ASIC’s enforcement powers, will also dramatically increase civil fines and introduce dozens of new civil penalty provisions.

Opposition Leader Bill Shorten said the royal commission revelations had been “shocking and shameful” and called on Malcolm Turnbull to extend its time and resources.

tom.minear@news.com.au

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Original URL: https://www.heraldsun.com.au/news/victoria/turnbull-government-crackdown-on-corporate-misconduct-increases-jail-terms-jacks-up-fines/news-story/882add17c9e9614ede51d0e577db1ac2