Will ASIC tell me if I am the target of an investigation?

Not necessarily. ASIC's notices usually identify the matters under investigation in general terms, but ASIC is not obliged to say whether a recipient is suspected of wrongdoing or is simply a source of information. The terms of a notice, the documents sought and the questions asked often indicate where the inquiry is heading, and that assessment should inform how you respond.

Can I talk to other people involved about the investigation?

Some ASIC powers carry express confidentiality requirements, and a notice or examination direction may restrict disclosure. Even where no formal restriction applies, discussing evidence with other potential witnesses can create serious problems, including allegations of collusion or interference. Get advice on what you can say, and to whom, before speaking to colleagues, directors or counterparties.

Can ASIC use what I say against me?

It depends on the power used and whether privilege is claimed. In a section 19 examination, an individual who claims the privilege against self-incrimination before answering obtains a limited use immunity in criminal and penalty proceedings under section 68 of the ASIC Act. The immunity does not cover derivative use, and it does not protect a company.

ASIC Investigation Lawyers | GopherWood Lawyers

In this practice area

Acting for companies, directors, licensees and individuals when ASIC investigates suspected contraventions of the Corporations Act or ASIC Act, and when it brings civil, administrative or criminal proceedings.

What an ASIC investigation is

The Australian Securities and Investments Commission administers the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth). Section 13 of the ASIC Act allows ASIC to investigate where it has reason to suspect a contravention of the corporations legislation, or of a law involving fraud or dishonesty relating to a company, a managed investment scheme or financial products.

Investigations commonly arise from breach reports lodged by licensees, liquidators' reports, complaints, market surveillance or media coverage. Typical subjects are directors' duties, continuous disclosure, misleading statements about financial products, market misconduct, licensing breaches and conduct in the lead up to an insolvency.

The legal framework

During an investigation ASIC may issue notices to produce books under sections 30 to 33 of the ASIC Act, require a person to attend a compulsory examination under section 19, and seek search warrants. Failing to comply without reasonable excuse is an offence.

At the end of an investigation ASIC can take several paths. It may commence civil penalty proceedings in the Federal Court or the Supreme Court seeking declarations, pecuniary penalties, compensation and disqualification orders. It may refer a brief to the Commonwealth Director of Public Prosecutions. It may take administrative action, such as a banning order or licence conditions, or accept an enforceable undertaking under section 93AA of the ASIC Act. ASIC can also issue infringement notices for some contraventions.

How these matters run

Many investigations begin with a letter or a notice rather than any indication of the full scope of inquiry. ASIC is not required to tell a person whether they are a suspect or a witness. The early phase is about compliance with notices, preservation of documents and careful preparation for any examination.

Investigations can run for months or years. ASIC may later write setting out its concerns and inviting a response before it decides whether to sue. That letter is an important opportunity to correct factual errors and put legal answers to the case theory before positions harden. Once proceedings start, the matter runs as contested litigation under the court's rules, with pleadings, discovery, evidence and a trial, unless it resolves by agreed facts and penalty submissions.

How GopherWood Lawyers acts

We start by identifying the power ASIC is exercising, the likely subject of the investigation and the client's position in it. We manage notice compliance, privilege review and document production, prepare witnesses for examination and attend with them.

Where ASIC signals proceedings, we prepare a considered written response and, where it serves the client, open discussions about the form of any outcome. If proceedings are commenced, we defend them through to trial or negotiated resolution, briefing counsel where the matter requires it.

ASIC Investigations & Proceedings