An Analysis of the Use of Civil Penalties by the Australian Securities and Investments Commission

Abstract

Civil penalties were introduced into the Australian corporations legislation in 1993. They were little used initially. Only 14 civil penalty actions were commenced by the corporate regulator in the first six years. Over the past three decades, the civil penalty regimes which the Australian Securities and Investments Commission (ASIC) enforces have significantly expanded. To understand the impact of these changes, the authors analyse a dataset of all ASIC's civil penalty actions that were finalised for the 10-year period from 2013 to 2022. Based on this analysis, the authors argue that civil penalty actions have now become a very significant part of ASIC's enforcement strategy. The authors also discuss other aspects of ASIC's use of civil penalties including ASIC's success rate in this type of litigation, the characteristics of the defendants, the most common claims made by ASIC in civil penalty proceedings and the orders most often imposed by the courts. The authors identify possible reasons for their findings.

Keywords: corporate law; enforcement; civil penalties; Australian Securities and Investments Commission