ASIC action generates nearly $190m in civil penalties and fines from improper business conduct

The corporate regulator has increased enforcement action against improper action by corporate Australia, netting taxpayers close to $200m in revenue from civil penalties and fines.

Enforcement action by the corporate regulator has netted the taxpayer close to $190m in the past financial year.

The Australian Securities and Investments Commission annual report for the 2023 financial year shows that enforcement action from the regulator resulted in 35 criminal convictions and almost $185.4m in civil penalties and fines imposed by the courts.

This compared to $230m in the previous period, $189.4m in 2020-21 and $24.9m in the 2020 financial year. Criminal proceeds totalled $189,640 with a 90 per cent success rate in court, versus $2.1m in the year prior, which ASIC attributed to a larger‑than‑usual proportion of matters resulting in custodial sentences instead of fines.

ASIC chairman Joe Longo said the regulator continued to focus on enforcement action in the last financial year, driving positive outcomes for consumers and small businesses, and ensuring trust in the country’s financial system. “ASIC remains focused on maximising our regulatory impact by addressing areas of greatest harm,” he said.

“Our priorities reflect the key trends and emerging issues in our regulatory environment, including the growth in sustainable finance, Australia’s ageing population, emerging and disruptive digital technologies and associated risks, and product design and distribution.”

ASIC increased the number of investigations it had commenced in the 12 months to June 30 from 107 to 133. The increase in companies under the microscope of the regulator coincided with the average total time to complete an investigation and reach a court decision rising from 33 months to 42 months.

Action against auditors surged to 468 in the past fiscal year, from 59 in the year prior. The increase in action taken against auditors is attributed to outstanding annual statements for more than 1400 self-managed superannuation funds.

In the past year, ASIC launched its first enforcement action for alleged greenwashing, which recently saw Vanguard ­issued three infringement notices totalling $39,960. Other recent wins for ASIC include a $2.1m penalty for NAB for engaging in “unconscionable conduct” when it overcharged customers fees it knew it was not entitled to in 2017 and 2018. It was a modest fine the court said was “wholly inadequate” for the ­severity of the offence.

“There are a significant number of ongoing investigations and surveillance activities that we will report on in the year ahead,” Mr Longo said.