The reality of ASIC's post Royal Commission 'why not litigate' philosophy has been brought into sharp focus by its almost daily media releases detailing action taken by the corporate regulator, as well as the publication of its enforcement update for July to December 2020.
In this article, partner Selina Nutley provides a quick summary highlighting ASIC's actions and some notable outcomes and sends a timely reminder to seek advice promptly if you find yourself involved in an ASIC investigation.
ASIC reports its actions led to the imposition of civil penalties by the courts totalling $159.8 million and heralded a 64 percent increase in civil penalty proceedings and a 36 percent increase in criminal proceedings. Additionally, it banned 22 people from providing financial services or credit, disqualified 28 people from directing a company, and has more than 300 investigations on foot.
Some notable enforcement actions include:
ASIC is presently developing its enforcement priorities for the 2021-22 financial year with the aim of directing enforcement resources to significant areas of need, including new or emerging issues. Its report says it will continue to encourage those under investigation to cooperate with ASIC as fully and quickly as possible, to ensure only those issues genuinely in dispute will become the subject of possible proceedings.
Whatever its enforcement priorities for the upcoming financial year may be, the implications of ASIC's new litigation philosophy are already being felt keenly across the industry. We have had reports of clients being declined renewal of their insurance policies, with insurers citing risks arising from ASIC's enforcement activism and AFCA's approach to dispute resolution as key reasons.
If you experience difficulties in insurance renewal, or find yourself involved in an ASIC investigation, you should seek advice promptly. Our Funds Management and Litigation lawyers have extensive experience and are best positioned to help you navigate these issues.