New laws aimed at strengthening the investigative and punitive powers of the Australian Securities and Investment Commission (ASIC) are a welcome addition, says corporate advisory partner Byron Koster.
The laws, which will be introduced into Parliament as of today (29 September) under an amended Corporations Act, will allow ASIC to impose tougher penalties and use tools such as phone tapping in its surveillance operations.
According to Koster, a partner in the Corrs Chambers Westgarth corporate advisory group in Sydney, the laws are a valuable addition to ASIC's arsenal.
"Insider trading and market manipulation are difficult to control and difficult to prove. ASIC needs lots of tools to assist it in doing these things," he told Lawyers Weekly.
"It is important for our markets to operate in a fair way and these measures are likely to increase market fairness."
Koster says the move, which will allow ASIC to impose penalties of up to ten years imprisonment, and fines of up to $450,000 for individuals and $4.5 million for corporations found to be involved in insider trading, is welcomed by clients.
"Clients ... are oriented to compliance and seek to avoid insider trading by putting in place control measures. If anything, they welcome the changes because they are likely to have the effect of deterring their employees from engaging in market misconduct," he said.
While ASIC has come under fire in the past for a string of failed prosecutions, Koster is more forgiving and is confident the new powers will render their job much easier.
"I think ASIC has done a reasonably good job with insider trading prosecutions," he said.
"Insider trading is hard to prove. The new powers will assist ASIC in a difficult area.