Australia's 'Company Law Watchdog': The Australian Securities and Investments Commission and the Civil Penalties Regime

摘要

The focus of this article is on the extent to which Australia's "company law watchdog" - the Australian Securities and Investments Commission (ASIC) - can and does effectively regulate corporate misconduct. In 1993, the law relating to enforcement of the statutory duties of company officers in Australia underwent a dramatic transformation when the civil penalty regime, currently found in Pt 9.4B of the Corporations Act 2001 (Cth), was introduced. The reforms were designed to enable ASIC to deal with corporate wrongdoing more effectively than under the previous criminal law regime. ASIC has met with some success in using the civil penalty regime against directors in high profile cases. Nevertheless, this article contends that ASIC's ability to rely on civil penalties under Pt 9.4B is compromised. Despite Parliament's preference for civil, rather than criminal, processes in civil penalty proceedings, the courts are treating civil penalties as quasi-criminal offences. Fresh evidence that ASIC's major enforcement efforts are being impeded is ASIC's defeat in October 2012 in the high profile case against Fortescue Metals and its chairman and former CEO, Andrew Forrest, for misleading and deceptive conduct over statements made to the market in 2004 that a deal struck with Chinese state-owned entities involved "binding contracts ". In holding that Fortescue Metals and Forrest had no case to answer, the High Court of Australia in Forrest v Australian Securities and Investments Commission found that ASIC failed in its pleadings to clearly identify the case which it was seeking to make against the defendants, undermining their right to a fair trial. The ideal solution remains the enactment of legislation to resolve the procedural obstacles facing the use of civil penalties. If this occurred, ASIC would be better placed to implement Parliament's aim and be a more effective regulator.