Australians who commit white-collar crimes such as fraud should face stronger penalties, according to a University of Queensland researcher.
TC Beirne School of Law’s Dr Vicky Comino said existing penalties for offences under the Corporations Act 2001 meant Australia fell below the world standard.
“Based on evidence, what white-collar criminals feared most was going to jail – and increased prison sentences could help address the problem,” Dr Comino said.
“Stronger civil and criminal penalties – including jail terms longer than the current five years for directors who act fraudulently and breach their duties – should provide a stronger deterrent for potential wrongdoers.
“These types of crimes cost society millions of dollars, especially in the case of financial fraud and misconduct.”
Dr Comino is working on a project to assist policy-makers and regulators such as ASIC to better cope with corporate and financial wrongdoing in Australia.
“Since former chair of the Australian Securities and Investments Commission (ASIC) Greg Medcraft controversially declared Australia was a ‘paradise’ for white-collar crime in 2014, there have been a number of inquiries,” Dr Comino said.
“These include a Senate inquiry in 2017 that found criminal, civil and administrative penalties for white-collar crime were inadequate and were not strong enough to deter misconduct,” she said.
“If law reforms eventuate, they will benefit all Australians by better arming ASIC with the ability to deal with corporate and financial misconduct in a more effective way.”
Dr Comino said the reforms would be timely in helping to restore public trust and confidence in the financial sector, and in Australia’s legal and political institutions.
“Since the global financial crisis, mistrust of the financial sector has been at an all-time high, even in Australia, which avoided catastrophic losses,” she said.
“The succession of scandals embroiling major Australian banks no doubt contributed to this distrust and led to persistent calls for a Royal Commission to investigate their operations – this is now underway.”
While Australia is the focus of Dr Comino’s research, it also has global relevance.
She will travel to the United Kingdom in 2018 to compare corporate and securities regulation in Australia, the UK and the United States.
Dr Comino will meet with professors at the University of Leeds to discuss setting up a public regulator similar to ASIC in the UK that would deal with breaches of directors’ duties.