SPECIALIST ADVICE ON ASIC OFFENCES

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Australian Securities and Investment Commission is there to protect the honest traders and the Corporate and while doing so in their best interest they have the powers to punish dishonest business and such people who are engaged in corrupt practices.

From 1991 there are engaged in Australia and controlling many areas which are important in business.

Directors Fraud –

Directors are considered one of the top most position not in just corporate world but also in the society as well. Directors hold powerful position and execute such orders that it can lead to lot of changes. Directors has to take the responsibility of the corporation or the company which they are hired for. When Directors do fraud, they are not just responsible for that action, but it is a serious crime which can lead to heavy penalization and fines.

 

Laws related to Directors Fraud –

  • Section 176A of the Crimes Act
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    Whosoever, being a director, officer, or member, of anybody corporate or public company, cheats or defrauds, or does or omits to do any act with intent to cheat or defraud, the body corporate or company or any person in his or her dealings with the body corporate or company shall be liable to imprisonment for 10 years.

  • CARRYING ON FINANCIAL SERVICES BUSINESS WITHOUT A LICENCE
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    If any person or business operator, himself or by any person on his behalf who is required to obtain licence, manufactures, sells, stores or distributes or imports any article without licence, is bad in law.

    Every Financial service business have to take licence from the respective authorities to run their business in Australia. It is important in many contexts that business should have such licences because if they don’t have it then they might be doing some wrong or illegal activities which can lead to disaster. To avoid such situation licensing is done so that the regulating body which are authorized by the government can do check and balance over the business which are indeed doing financial services.
    Laws related to CARRYING ON FINANCIAL SERVICES BUSINESS WITHOUT A LICENCE

    913B(1) ASIC must grant an applicant an Australian financial services licence if (and must not grant such a licence unless):
    (a) the application was made in accordance with section 913A; and
    (b) ASIC has no reason to believe that the applicant is likely to contravene the obligations that will apply under section 912A if the licence is granted; and
    (c) the requirement in whichever of subsection (2) or (3) of this section applies is satisfied; and
    (ca) the applicant has provided ASIC with any additional information requested by ASIC in relation to matters that, under this section, can be taken into account in deciding whether to grant the licence; and
    (d) the applicant meets any other requirements prescribed by regulations made for the purposes of this paragraph.
    913B(2) If the applicant is a natural person, ASIC must be satisfied that there is no reason to believe that the applicant is not of good fame or character.
    913B(3) If the applicant is not a single natural person, ASIC must be satisfied:
    (a) that:
    (i) if the applicant is a body corporate — there is no reason to believe that any of the applicant’s responsible officers are not of good fame or character; or
    (ii) if the applicant is a partnership or the trustees of a trust — there is no reason to believe that any of the partners or trustees who would perform duties in connection with the holding of the licence are not of good fame or character; or
    (b) if ASIC is not satisfied of the matter in paragraph (a) — that the applicant’s ability to provide the financial services covered by the licence would nevertheless not be significantly impaired.

    913B(4) In considering whether there is reason to believe that a person is not of good fame or character, ASIC must (subject to Part VIIC of the Crimes Act 1914) have regard to:
    (a) any conviction of the person, within 10 years before the application was made, for an offence that involves dishonesty and is punishable by imprisonment for at least 3 months; and
    (b) whether the person has held an Australian financial services licence that was suspended or cancelled; and
    (c) whether a banning order or disqualification order under Division 8 has previously been made against the person; and
    (d) any other matter ASIC considers relevant.

    913B(5) However, ASIC may only refuse to grant a licence after giving the applicant an opportunity:
    (a) to appear, or be represented, at a hearing before ASIC that takes place in private; and
    (b) to make submissions to ASIC in relation to the matter.
    The other laws suggest that the Court can penalize the offender for two years imprisonment or a fine of twenty-two thousand dollars.

  • FALSIFICATION OF BOOKS
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    If with intent to defraud or deceive any person, any officer or contributory of a company which is being wound up-
    (a) destroys, mutilates, alters, falsifies or secretes, or is privy to the destruction, mutilation, alteration, falsification or secreting of, any books, papers or securities; or
    (b) makes, or is privy to the making of, any false or fraudulent entry in any register, book of account or document belonging to the company; that is punishable by the law.

    If any person does falsification of books, then it is necessary that it done with the intent to cheat and break the trust of the people which are trusting them. It is considered wrong in terms of law and have huge impacts on the business which is been involved in such act.

    Laws related to FALSIFICATION OF BOOKS

    CORPORATIONS ACT 2001 – SECTION 1307
    (1) An officer, former officer, employee, former employee, member or former member of a company who engages in conduct that results in the concealment, destruction, mutilation or falsification of any securities of or belonging to the company or any books affecting or relating to affairs of the company is guilty of an offence.
    (2) Where matter that is used or intended to be used in connection with the keeping of any books affecting or relating to affairs of a company is recorded or stored in an illegible form by means of a mechanical device, an electronic device or any other device, a person who:
    (a) records or stores by means of that device matter that the person knows to be false or misleading in a material particular; or
    (b) engages in conduct that results in the destruction, removal or falsification of matter that is recorded or stored by means of that device, or has been prepared for the purpose of being recorded or stored, or for use in compiling or recovering other matter to be recorded or stored by means of that device; or
    (c) having a duty to record or store matter by means of that device, fails to record or store the matter by means of that device:
    (i) with intent to falsify any entry made or intended to be compiled, wholly or in part, from matter so recorded or stored; or
    (ii) knowing that the failure so to record or store the matter will render false or misleading in a material particular other matter so recorded or stored;
    contravenes this subsection.
    (3) It is a defence to a charge arising under subsection (1) or (2) if the defendant proves that he, she or it acted honestly and that in all the circumstances the act or omission constituting the offence should be excused.
    Note: A defendant bears a legal burden in relation to the matter mentioned in subsection (3), see section 13.4 of the Criminal Code .

  • MANAGE CORPORATION WHILST DISQUALIFIED
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    This type of practices is not just bad in law, but they give bad precedents for the future generations. If a person is disqualified due to various reason, then that person should not be engaged in any type of action which suggests that he is managing the corporation.

    Laws related to MANAGE CORPORATION WHILST DISQUALIFIED –

    SECTION 206B Automatic disqualification–convictions, bankruptcy and foreign court orders etc.
    (1) A person becomes disqualified from managing corporations if the person:
    (a) is convicted on indictment of an offence that:
    (i) concerns the making, or participation in making, of decisions that affect the whole or a substantial part of the business of the corporation; or
    (ii) concerns an act that has the capacity to affect significantly the corporation’s financial standing; or
    (b) is convicted of an offence that:
    (i) is a contravention of this Act and is punishable by imprisonment for a period greater than 12 months; or
    (ii) involves dishonesty and is punishable by imprisonment for at least 3 months; or
    (c) is convicted of an offence against the law of a foreign country that is punishable by imprisonment for a period greater than 12 months.
    The offences covered by paragraph (a) and subparagraph (b)(ii) include offences against the law of a foreign country.
    (2) The period of disqualification under subsection (1) starts on the day the person is convicted and lasts for:
    (a) if the person does not serve a term of imprisonment–5 years after the day on which they are convicted; or
    (b) if the person serves a term of imprisonment–5 years after the day on which they are released from prison.
    Bankruptcy or personal insolvency agreement
    (3) A person is disqualified from managing corporations if the person is an undischarged bankrupt under the law of Australia, its external territories or another country.
    (4) A person is disqualified from managing corporations if:
    (a) the person has executed a personal insolvency agreement under:
    (i) Part X of the Bankruptcy Act 1966 ; or
    (ii) a similar law of an external Territory or a foreign country; and
    (b) the terms of the agreement have not been fully complied with.
    (5) A person is disqualified from managing corporations at a particular time if the person is, at that time, disqualified from managing Aboriginal and Torres Strait Islander corporations under Part 6-5 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 .
    Foreign court orders
    (6) A person is disqualified from managing corporations if the person is disqualified, under an order madeby a court of a foreign jurisdiction that is in force, from:
    (a) being a director of a foreign company; or
    (b) being concerned in the management of a foreign company.
    Definitions
    (7) In this section:
    “foreign jurisdiction ” means a foreign country, or part of a foreign country, prescribed by the regulations as a foreign jurisdiction for the purposes of this section.

FAQs

  • Police has to prove in the Court –

    • That the accused is a director in a corporate entity
    • Accused has a malafied intention.
    • Accused was doing such type of planning to commit such crime.
    • They have evidences that accused has done a fraud.
    • Accused has done a fraud on a company or corporate entity.
    • Accused has financial relationship with that company or corporate entity.
  • District court and Local Courts will give justice to such cases.

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