The Australian Securities and Investment commission (“ASIC”) has extensive regulatory, investigative, and enforcement powers, the provision of which are driven by its mission to promote a strong, efficient, and innovative financial system. Its powers are broad and discretionary, and include intervening and banning defective products, legislating rules to maintain market integrity, to grant relief where necessary, and to investigate matters of misconduct.
A s19 Notice issued under the Australian Securities and Investment Commission Act 2001 requires a person’s assistance. ASIC can, where it is reasonably suspected or believed that you can provide relevant information to a matter that is, or is to be investigated, compel you to assist.
A s19 Notice will be served on you in writing, and it will require you to give ASIC ‘all reasonable’ assistance; this may include the production of documents, and or to appear in front of a specified member or staff member for examination. The examination is mandatory and will require you to answer questions under oath or affirmation.
Do I have to comply?
You must comply with any requirement imposed on you under a s19 Notice. It is an offence to refuse to cooperate with ASIC following receipt of a S19 Notice. A person who intentionally or recklessly fails to comply with a requirement made under s19 Australian Securities and Investment Commission Act 2001 may receive a penalty of two (2) years imprisonment. It is important to note, that ASIC regularly prosecute people for non-compliance. ASIC may also apply to the court for an order that directs you to comply.
What should I do?
If you are served with a s19 Notice, it is important you contact a lawyer. It is essential you understand the scope of the notice, and your rights and obligations when responding to it. This is of particular importance when you hold documents for a third party, you must ensure that you are not breaching any confidentiality or fiduciary duties by providing documents that are outside the scope of the notice. (Unless otherwise allowed by ASIC, you are only entitled to have a lawyer present during a s19 examination.) This is particularly important as you will be compelled to answer their questions. A Lawyer may assist by asking you questions and by monitoring the proceedings. This can be incredibly helpful if the examination becomes overwhelming, or the examiner’s questions or conduct become unlawful.
What are my rights?
Whilst there is no inherent privilege or protection under s19, you are entitled to claim that your answer to a question may expose you to self-incrimination or penalty. In doing so, you are still obliged to answer, but you protect yourself from the answer being used as evidence against you in criminal proceedings or a proceeding for the imposition of a penalty. However, this will not protect you if make a false statement after claiming privilege. A false statement may be used against you for an offence of failing to comply with the requirements of s19.
What happens next?
Following the completion of the ASIC interview / examination you will be provided with a copy/transcript of the examination and you will be asked to sign it. It is very important that you review its content and correct any errors as its contents may be used as evidence against you, or others in both civil and criminal proceedings. It is imperative you review and ensure the times you claimed ‘privilege’ were accurately recorded. The contents of the record are usually subject to confidentiality declarations, so as to prevent the leakage of information.
Are you exposed- If you are served with a S19 Notice by ASIC, or unsure of your exposure to legal proceedings already on foot, please call one of our experienced lawyers. Here at Rose Litigation, our lawyers are highly specialised and have extensive experience with Government and Regulatory Bodies and dealing with matters of corporate misconduct.