White-collar criminals should be pursued more vigorously and be subject to tougher punishment, according to the Australian Shareholders' Association.
The ASA says criminal convictions were rare for white-collar crime in Australia, and that potential penalties - and those actually imposed - have not been strong enough to deter offenders.
"The ASA believes there is a need for more criminal prosecutions and increased civil and administrative penalties for white-collar crime," the ASA said in its submission to the Senate Economics References Committee inquiry into penalties for white collar crime.
The ASA acknowledged that prison terms for white-collar crime in Australia were consistent with those overseas, but said there appeared to be a reluctance to apply them in anything other than very exceptional cases.
"What we have seen is a penchant for weak punishments such as good behaviour bonds or community service orders, even when the admitted wrongdoing has been serious, deliberate and systematic," the ASA said.
Inadequate criminal penalties, which were sometimes suspended, could also undermine public confidence in markets and the financial system.
The ASA said non-criminal penalties were too low and suggested they should range from at least the amount of the wrongful gain and up to 10 times the financial benefit.
If there was no clear quantifiable gain, the ASA said, the corporate watchdog should have the power to penalise the wrongdoer: for example, by up to $5 million for a body corporate and $1 million for an individual.
The ASA said the Australian Securities and Investments Commission also should be able to pursue both criminal and non-criminal penalties for the same instance of wrongdoing.
ASIC needed more money and resources to enable it to investigate and pursue more cases in a timely manner, the ASA said.
ASIC has not yet made a submission to the Senate Economics References Committee but expects to do so within two weeks.
An ASIC spokesman said the watchdog had long expressed the view that penalties for white-collar crime should be higher.
The Senate Economics References Committee is expected to report by July 27.
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