Recently, the Australian Securities & Investments Commission (ASIC) announced its Enforcement Priorities for 2023. This was the first time ASIC identified particular areas of enforcement focus for a specific year.
In a new communication, ASIC has issued a reminder that it is serious about its enforcement priorities for the year, and will be actively targeting practices such as greenwashing, predatory lending and misleading insurance pricing promises.
ASIC’s enforcement priorities for 2023
Throughout 2023 ASIC will prioritise enforcement against:
- Poor design, pricing and distribution of financial products.
- Misleading conduct in relation to sustainable finance including greenwashing.
- Misconduct involving high risk products including crypto assets.
- Investment scams.
- Predatory lending practices.
- Misleading and deceptive conduct relating to investment products.
- Misconduct in the superannuation sector.
- Failures by providers of general insurance.
- Misconduct that involves misinformation through social media.
- Governance and director’s duties failures.
- Manipulation in energy and commodities derivatives markets.
- Unfair contract terms.
ASIC also has additional enduring priorities such as misconduct damaging to market integrity including insider trading, continuous disclosure failures and market manipulation.
“We take our role to protect consumers and investors seriously and won’t hesitate to take action to protect consumers where we identify poor conduct”, said ASIC Deputy Chair Sarah Court.
Recent actions taken by ASIC
Ms Court said the actions taken during the final quarter of 2022 reflect ASIC’s enforcement priorities as well as its strategic priorities for 2022-26.
“In the final three months of last year we commenced a number of significant enforcement and regulatory actions to address misconduct, market integrity threats and consumer harms in sectors including financial services, retail and crypto-assets”, Ms Court said.
“This includes corporate governance and directors’ duties, product design and distribution, and misleading statements involving sustainable finance practices.”
Between July and December 2022, 173 criminal charges were laid, $76.3 million in civil penalties were imposed by the courts and 62 investigations were commenced with another 103 investigations ongoing. This brings the total for the 2022 calendar year to 312 criminal charges being laid and $222.1 million in civil penalties imposed by the courts.
Examples of specific actions taken by ASIC include:
- Action against former directors of Star Entertainment Group Limited for alleged breaches of their director and officer duties involving money laundering risks.
- Issuance of design and distribution obligations (DDO) stop orders to prevent consumers and investors being targeted by products inappropriate to their objectives, financial situation and needs.
- First action against greenwashing taken in October 2022 and infringement notices issued for misleading sustainability-related statements.
Key takeaways
ASIC is reminding entities that it is serious about enforcing particular areas in 2023 including greenwashing, predatory lending and misleading insurance pricing promises, amongst others. Actions taken towards the end of 2022 reflect ASIC’s commitment to its enforcement priorities, as well as its ongoing strategic priorities, and show that in 2023 ASIC won’t hesitate to take action to protect consumers where it identifies poor conduct.
