12 February 2025
3 min read
#White Collar Crime & Regulatory Investigations, #Dispute Resolution & Litigation
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Following a legislative change in June 2024, the Australian Secruities and Investments Commission (ASIC) has been quick to use the Federal Court’s expanded jurisdiction to oversee a range of criminal matters. The Attorney General's Portfolio Miscellaneous Measures Act 2024 (the Act), significantly expands the Federal Court's jurisdiction to include various white-collar crime offences. This Act confers jurisdiction on the Federal Court to hear and determine prosecutions for indictable offences against several key pieces of legislation, including the Corporations Act 2001, the Australian Securities and Investments Commission Act 2001, and specific provisions of the Criminal Code related to white-collar crimes such as bribery of foreign public officials, forgery, identity crime, money laundering, computer offences, financial information offences, and accounting records.
These changes were driven by the need to address the growing incidence and complexity of white-collar crime, ensuring that such offences could be prosecuted effectively at the federal level.
ASIC has welcomed the newly expanded jurisdiction of the Federal Court, noting in its submission to the Senate Legal and Constitutional Affairs Committee that contraventions of civil penalty provisions, which the Federal Court regularly handles, often attract criminal penalties. ASIC also stated that the new powers would expand the Court’s capacity and help reduce delays in financial crime prosecutions.
Daniel Kirby and Stavro D’Amore, former directors of Berndale Capital Securities Pty Ltd, a collapsed retail over-the-counter derivatives provider, were charged with dishonesty offences, including misusing over $1 million in company funds in June 2023.
In 2018, ASIC cancelled Berndale’s financial services licence due to concerns surrounding failure to comply with various reporting obligations, failure to comply with statutory notices and that its representative was not adequately trained or competent to provide financial services. Before and after the licence cancellation, it was alleged that Mr Kirby illegally transferred Berndale company funds to benefit himself and other associates and entities. It was further alleged that Mr Kirby also submitted false or misleading documents to Berndale’s auditor about the amount of funds available in overseas Berndale bank accounts.
On 16 September 2024, Mr Kirby plead guilty to three offences, and Mr D’Amore pleaded not guilty on all charges and was committed to stand trial in the criminal division of the Federal Court on a date yet to be fixed.
The expanded jurisdiction of the Federal Court marks a significant change, given its jurisdiction was previously confined to civil matters, albeit with the exception of a limited criminal jurisdiction to hear cartel offences brought by the Australian Competition and Consumer Commission.
For over a century, criminal matters have been within the remit of state and territory courts. However, the Federal Court’s new powers, introduced under the Act means that state and territory courts will now share the jurisdiction to hear corporate crime matters with the Federal Court.
The June 2024 amendments can be traced back to the findings of the 2018 Banking Royal Commission, after which the Morrison government began to increase the Federal Court’s powers, anticipating a wave of criminal cases being brought against the banks and their employees.
The Act’s explanatory memorandum justifies the conferral of criminal jurisdiction on the Federal Court for three reasons:
It remains to be seen how these changes will impact the Court’s capacity with former ASIC Commissioner Pamela Hanrahan stating that she suspects “criminal prosecutions will remain unusual for large corporate defendants” but believes there may be a rise in individual misconduct cases.
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Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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