ASIC poised to recover costs

Last month, the Australian Securities and Investments Commission (ASIC) announced it intends to recover the costs of its investigations into people who are successfully prosecuted as a result of its actions.

Generally, ASIC pays the expenses of investigations it conducts, however, under s91 of the Australian Securities and Investments Commission Act 2001, ASIC may make an order to recover investigation expenses and costs where that investigation has led to a successful prosecution or civil proceeding against a person.

ASIC's new approach, along with other factors it will consider before using its power, has been detailed in Information Sheet 204 Recovery of investigation expenses and costs. This will come into effect for investigations beginning 29 July 2015. Some investigations commenced before this date may also be considered.

ASIC said it would consider all the circumstances of a case in deciding whether to make an order to recover investigation expenses and costs. Some of these include, exceptional hardship of the individual, degree of culpability and co-operation and likely effect on the victims.

When considering an order against an individual to recover costs and associated expenses with their investigation, ASIC said that persons would be notified prior to any sentence hearing or hearing on penalty or other relief. A reasonable period of time will be considered to any proposed order and to an individual who makes written submissions to ASIC with regards to whether the order should be made, as well as the amount and implications of the order.

If a person does not comply with an order that ASIC has made within the time specified in the order, as a rule, action will be take to recover any amount unpaid. A penalty of $8,500 or imprisonment for one year, or both, could also be applicable. An order to recover the expenses or costs of an investigation is enforceable in court as a debt due to ASIC.

Read the information sheet on Recovery of investigation expenses and costs.