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$51m war chest unveiled to combat financial misconduct

$51m war chest unveiled to combat financial misconduct

Chest with coins

The federal government has announced that it will be providing an additional $51.1 million to the public prosecutor to battle criminal misconduct in the financial services sector.

Treasurer Josh Frydenberg announced that the federal government will provide the Commonwealth Director of Public Prosecutions (CDPP) and the Federal Court of Australia with a $51.1 million funding boost to combat criminal misconduct in the banking and financial services sector, and to ensure civil claims are “dealt with effectively and expeditiously”.

Mr Frydenberg noted that the Australian Securities and Investments Commission’s (ASIC) increased enforcement activity, which he said stemmed from the additional $70 million in funding from the federal government, is expected to “give rise to more prosecutions by the CDPP and more civil corporate misconduct cases before the Federal Court”.

“This includes cases highlighted by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry,” he said.

Mr Frydenberg added that as part of this funding boost, an additional $41.6 million will be provided to the CDPP over eight years, which he said will allow the CDPP to consider more prosecutions put forward by ASIC and hire additional prosecutors to manage the increased caseload.

“This additional funding will also allow the CDPP to prosecute cases faster to ensure individuals and companies that have broken the law face justice sooner,” he continued.

Moreover, Mr Frydenberg said that a further $9.9 million will be provided to the Federal Court of Australia over four years to fund the appointment of additional resources including two new judges to support civil cases.

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“These appointments will enable the Federal Court to accommodate an increase in disputes with financial institutions as well as civil claims resulting from ASIC’s increased enforcement activity,” the treasurer said.

Mr Frydenberg stated that the government has also asked the Attorney-General’s Department (AGD) to conduct a review of whether the Federal Court’s criminal jurisdiction should be expanded to include corporate crime.

“Any criminal prosecutions for misconduct by banks and other financial institutions are currently heard in state courts and hence have to compete with state cases for resources and scheduling,” he continued.

“The creation of this additional criminal jurisdiction in the Federal Court would allow these prosecutions to be prioritised and penalties for breaches of the law to be handed out faster.

The AGD is also set to consult with relevant stakeholders including the states in undertaking the review and provide its report to the government in January next year.

In addition, Mr Frydenberg revealed that the government will establish a Committee of Regulatory Enforcement Strategy chaired by the Attorney-General’s Department and comprising representatives from the relevant agencies that regulate the financial services sector.

“These agencies will meet on a regular basis to discuss enforcement matters in the sector and provide feedback to the Government on regulatory and civil enforcement policy,” he said.

This latest announcement comes just days after the government unveiled plans for a $2 billion securitisation fund specifically to drive competition in the commercial lending space in order boost lending to SMEs.

$51m war chest unveiled to combat financial misconduct
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