Our client was a company that was facing several ASIC charges of failing to report information under the Corporations Act. These included offences relating to Directors resident in Australia and also financial reporting.
The failure to lodge offence has a maximum penalty of a fine of $252,000 on each offence. A number of the ASIC offences were also punishable by 12 months imprisonment.
What is alleged to have occured?
The company had a long history of failing to comply with its corporate obligations, in contravention of numerous sections of the Corporations Act 2001 (Cth) (the Act).
What happened at court?
At the beginning of the hearing, the prosecutor “rolled up” 6 of the charges by the Australian Securities and Investments Commission – meaning that only charge 1 proceeded with amended wording to cover the 6-year date span of the ASIC reporting breaches.
The prosecutor tendered a summary to the Court and submitted that deterrence was a very important principle in cases such as this as it is needed to protect shareholders. She said that the case exemplifies the importance of having multiple directors and remaining compliant with ASIC requirements as this would have been less likely to occur with multiple directors. The prosecutor asked the Court to impose a conviction on the company and also to impose a fine.
Following those submissions, a plea in mitigation was conducted on the company’s behalf. Submissions were made about the relevant principles of law. The Court was informed about the circumstances of the breaches and the steps taken to ensure compliance going forward.
The ultimate submission was that extenuating circumstances were made out and that it would be inexpedient to impose punishment – therefore a “Section 19B bond” (bond without conviction) was available and was sought.
The Magistrate accepted those submissions. Her Honour noted the strength of the supporting materials, the salutary effect of these proceedings, the seriousness with which our client had taken this matter.
What was the result?
For the ASIC charges of failing to report information, the ultimate sentence was a Section 19B Bond for 12 months’ duration with recognizance set at $1,000. This amount would only need to be paid if there was a further breach by offending.
DISCLAIMER: This is a real case study of an actual case from our files. Details pertaining to the client have been changed to protect their privacy. The sentence imposed and the charge have not been altered. These case studies are published to demonstrate real outcomes and give an indication of possible tariffs in Court. We do not guarantee a similar case on these charges will get the same result. Please note that we post results at our discretion, therefore while many case studies are average results, others are notable for their exceptional outcomes. PUBLISHED 14/10/2024
