Receiving a compulsory statutory notice from ASIC or the
ACCC should put even the most seasoned director or executive on
alert for two reasons. First, you can go to gaol for not complying
with a statutory notice or for knowingly providing false or
misleading information. Second, you have to answer questions in an
oral examination even if they incriminate you.
Recent action by the regulators has put a spotlight on the risks
of not complying, or interfering with compliance.
If you are served with a statutory notice, you should seek
proper advice as to its validity and scope. Both regulators
encourage open dialogue with them about difficulties you face in
complying, including requests for extensions of time.
Repercussions for non compliance
Not complying with a statutory notice or knowingly providing
false or misleading information or statements is a criminal offence
with varying penalties:
for an ACCC notice, you may be convicted and face a fine of up
to 20 penalty units ($3,600) or imprisonment for 12 months; or
for an ASIC notice, you may be convicted and face a fine of up
to 100 penalty units ($18,000) or imprisonment for 2 years or
The penalties are not restricted to persons named on the notice
and may extend to persons who have in some way aided the
In ACCC v Davies  FCA 1017, the ACCC successfully
brought criminal proceedings against Mr Davies, the sole director
of Natural Food Vending Pty Ltd for aiding and abetting NFV's
failure to comply with a notice. He put the company into external
administration without taking steps to let the liquidator know
about the ACCC notice, nor how to find the relevant
In another example, the Federal Court recently convicted Mr
Michael Anthony Boyle of knowingly giving false or misleading
evidence to the ACCC in an oral examination.
Privilege against self-incrimination
If you are required to attend an oral examination, you may want
to rely upon the privilege against self-incrimination. For ASIC
examinations in particular, you need to say 'privilege'
before giving each response. Keep in mind that even if you assert
this privilege, you are still required to answer the question or
provide the information requested.
The protection afforded to you is limited to how regulators can
later rely on your answers as evidence.
For example, whilst the ACCC cannot rely on your answers in
criminal proceedings against you, it can rely on
your answers as evidence in civil proceedings, including
proceedings in which the ACCC is seeking a penalty.
Similarly, whilst ASIC cannot rely on your answers in criminal
proceedings or civil proceedings against you where it is seeking a
penalty, it can rely on your answers as evidence in civil
proceedings where ASIC is seeking declarations or injunctions (but
not a penalty).
Compliance with statutory notices is compulsory. We often see
situations where someone has tried to 'go it alone' –
without advice. The most common mistakes people make is not
asserting the self-incrimination privilege they are entitled to,
and failing to comply with notices.
The regulators pick up on the failure to comply pretty quickly
– and this may unfavourably influence their attitude towards
you for the balance of the investigation.
Get proper advice on your obligations and avoid the perils of
not playing a straight bat. It could save you your reputation and a
whole lot of money.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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