ASIC compulsory examinations under section 19
Section 19 of the Australian Securities and Investment Commission Act 2001 (Cth) (the ASIC Act) empowers ASIC to issue a notice requiring a person to appear for examination. This can happen if ASIC suspects or believes that the person can provide information relevant to an investigation.
The notice can require the person to:
- provide reasonable assistance in connection with the investigation.
- appear before a specified member or staff member for examination on oath or affirmation and answer questions.
ASIC investigation powers
The Australian Securities and Investments Commission (ASIC) is Australia’s corporate, markets, financial services, and consumer credit regulator. One of ASIC’s legislated purposes is administering and enforcing laws to protect consumers, investors, and creditors by ensuring compliance with financial regulations.
To achieve this purpose and ensure compliance with financial regulations, ASIC has a range of investigation powers.
- Compulsory information gathering: ASIC can issue notices requiring individuals or entities to provide documents and information or attend examinations to answer questions under oath.
- Surveillance and monitoring: ASIC conducts regular surveillance of financial markets and entities to detect and prevent misconduct.
- Search warrants: ASIC can obtain search warrants to enter premises and seize documents or other evidence relevant to an investigation.
- Interviews and examinations: ASIC can compel individuals to attend interviews and examinations to provide information and answer questions.
Privilege against self-incrimination when participating in an ASIC examination
The fact that the answer to a question might tend to incriminate the person or make the person liable to a penalty is not a reasonable excuse for a person failing or refusing to answer a question asked in an examination under section 19 (section 68(1) of the ASIC Act).
However, the answers you give cannot be used against you in criminal proceedings if a claim of privilege against self-incrimination is made. Unlike other compulsory examinations where a blanket protection can be given at the start of a hearing, to claim this privilege it must be done before each and every answer.
Legal professional privilege during ASIC examinations
If the answer to a question asked in an ASIC examination will disclose information subject to legal professional privilege, an examinee has the right to refuse to answer the question or produce the document.
Whether something is subject to legal professional privilege is a factual and legal question, and an examinee should consult a lawyer about this.
You can learn more about this concept in our earlier article, “Legal Professional Privilege”.
Where legal professional privilege is claimed, it will be necessary for the examinee to provide the ASIC inspectors with sufficient information to allow them to make an informed decision about whether the claim for privilege can be supported. This mirrors the common law position that a person who claims legal professional privilege has the onus of establishing that privilege.
Failure to comply with an ASIC section 19 notice
Failure to comply with an ASIC section 19 notice is an offence.
Non-compliance with a section 19 notice from ASIC can have serious consequences. If a person intentionally or recklessly fails to comply with the notice, they can face a maximum penalty of 2 years imprisonment. However, there are defences available, such as having a reasonable excuse or stating the matter to the best of their knowledge or belief.
Prosecutions by ASIC for non-compliance with section 19 notices are relatively rare but do occur. ASIC typically focuses on ensuring compliance through other means, such as issuing warnings or seeking cooperation before resorting to prosecution. However, when non-compliance is significant or persistent, ASIC does take legal action to uphold its regulatory responsibilities.
If you’ve been cautioned by ASIC about failure to comply with a notice or informed of a possible prosecution, you should seek legal advice early.
Providing false answers in an ASIC section 19 interview
More commonly, ASIC will pursue a prosecution for providing false or misleading information in an examination.
It is an offence pursuant to section 64(1) of the ASIC Act to give information or make statements in a section 19 interview that are false or misleading in a material particular.
The maximum penalty for this offence is 2 years imprisonment or 100 penalty units, or both.
It is a defence if it is proved that the defendant when giving the information or evidence or making the statement, believed on reasonable grounds that it was true and not misleading.
Get help from a criminal lawyer
If you have received a notice to attend an examination under section 19 of the ASIC Act, this means ASIC has formed a view that you can assist them with a formal investigation they are conducting.
If you have received a notice, you should get urgent legal advice.
Similarly, if you have been charged with providing false or misleading information in examination, you should seek legal advice urgently in relation to possible defences.
Contacting Gilshenan & Luton Lawyers
📞 07 3361 0222 (24/7)
This article is of a general nature and should not be relied upon as legal advice. If you require further information, advice or assistance for your specific circumstances, please contact Gilshenan & Luton, Criminal & Employment Lawyers Brisbane and Sunshine Coast, Queensland.
