The chairman of the Australian Securities and Investments Commission (ASIC) the watchdog’s traditional punishment of “enforceable undertakings” – making wrongdoers promise not to break the law again – was not enough on its own, and said fear of imprisonment is the strongest disincentive.
“The thing I believe white-collar criminals fear the most is going to jail,” Medcraft told a Reuters Financial Regulation Summit earlier this week.
“We will in the future be looking to more a hybrid solution where there might be enforceable undertaking, but that doesn’t necessarily preclude a court-based outcome.”
In March, the regulator racked up its biggest win with a seven-year sentence for an insider trader, the country’s longest ever for that crime.
ASIC has an “enforcement special account” to fund prosecutions worth A$30 million ($23.77 million) a year, Medcraft said, but since he started in the role four years ago it has grown the fund to A$50 million and now plans to use it for more and bigger prosecutions.
He added that since the record insider-trading sentence two months ago, ASIC has experienced a spike in the number of people turning themselves in for suspected financial crimes or pleading guilty at the first opportunity in the hope of getting leniency in punishment.
