The man who helped start the royal commission into the banking system has backed paying whistleblowers who reveal corporate criminal activity amid complaints financial firms are getting away with “parking fines” for actions undermining hundreds of thousands of people.
It also supported the introduction of financial rewards for corporate whistleblowers if their revelations delivered significant public benefit, while those whose careers were destroyed by their actions should receive compensation. In the United States, corporate whistleblowers can receive between 10 and 30 per cent of the value of fines against criminal companies.
Morris said he was disappointed that the federal government had failed to act on commitments made after the Hayne Royal Commission that it would consider payments for whistleblowers, arguing it had taken more legal action against people prepared to speak publicly. The committee found that ASIC under-utilised its extensive powers to enforce corporate law, with its actions “frequently mild” compared to the severity of wrongdoing and the harm inflicted on investors and the broader economy.
University of Wollongong financial regulation academic Andy Schmulow said the Senate report was a good start towards overhauling ASIC which was struggling under its dual mandate of managing companies while policing the financial sector. “They have a very high success rate in court. But that’s not an indication of them doing a good job, it’s an indication that they’re not taking any risks,” he said.“At the moment, the penalties themselves are not enough. It’s not more than a parking fine of $60 while these companies make tens of millions of dollars.”