SYDNEY, Feb 19 (Reuters) - Australia's corporate regulator, which was criticised heavily by a misconduct inquiry for being soft on the financial industry, said on Tuesday it expects to refer major financial institutions and their representatives for criminal prosecutions.
The Australian Securities and Investments Commission (ASIC)has previously preferred to negotiate with offending companies instead of prosecuting them. But a government-mandated inquiry into financial sector misconduct that ended earlier this month castigated the practice, and also recommended more oversight of the regulators themselves.
The inquiry, called the Royal Commission, found instances where ASIC and the Australian Prudential (LON:PRU) Regulation Authority(APRA) had responded inadequately to serious cases of misconduct by financial services providers.
In a statement on Tuesday, ASIC said it will seek criminal prosecutions not only for the cases of misconduct recommended by the inquiry or reviewed publicly by it but also for others expected to be thrown up by investigations being done by its enforcement teams.
"Aside from the Royal Commission case studies, ASIC's enforcement teams are undertaking a large volume of work on a range of misconduct relating to major financial institutions and their representatives," the regulator added, without naming any corporation.
"ASIC expects these investigations to result in a number of referrals to the Commonwealth Director of Public Prosecutions for assessment for criminal prosecution."
The regulator said that since deciding to adopt a new "why not litigate?" strategy in October, it had increased the number of enforcement investigations of misconduct by large financial institutions by 50 percent.
New laws will expand ASIC's powers to prosecute wrongdoing, as well as its ability to pursue harsher penalties and criminal sanctions against banks and their executives, including prison terms of up to 15 years.