The Expansion of Civil Penalties Under the Corporations Act

Abstract

In an article published in 1999, Gilligan, Bird and Ramsay presented the results of a detailed research project in which they noted that during the six years of operation of civil penalties in Australian corporate law, the Australian Securities and Investments Commission (ASIC) had brought only 14 civil penalty actions relating to ten case situations. An important issue raised by the authors was whether ASIC was making effective use of civil penalties as an enforcement tool.

This brief article discusses two ways in which there has occurred an expansion of civil penalties. First, ASIC now appears to be more active in relation to the use of civil penalties. Second, the Financial Services Reform Act 2001, which was passed by Federal Parliament in August 2001, extends the application of the civil penalty provisions of the Corporations Act to cover market misconduct provisions such as insider trading and continuous disclosure.