Global Investigations Review - The law and practice of international investigations

Securities & Related Investigations

Last verified on Wednesday 9th October 2019

Australia

Rani John and Tim Hardwick
DLA Piper

    Regulatory environment

  1. 1.What are your country’s primary securities or related law enforcement authorities? 
  2. Australia's primary securities law enforcement authority is the Australian Securities and Investments Commission, otherwise known as ASIC. ASIC takes enforcement action on its own or refers matters to the Commonwealth Director of Public Prosecutions (CDPP), depending on the nature of the matter. The Australian Securities Exchange (itself a publicly traded company) oversees compliance with its operating rules, and promotes standards of corporate governance among Australia’s listed companies. 

  3. 2.What are the principal violations or legal issues that the securities or related law enforcement authorities investigate?
  4. From a securities context, the principal violations or legal issues that ASIC investigates relate to continuous disclosure obligations, market integrity rules, insider trading and market manipulation, and other market misconduct.

  5. 3.If there is more than one authority involved in a securities or related investigation, how is jurisdiction allocated? What is the interplay between the securities regulator and the public prosecutor?
  6. Generally, ASIC will have primary carriage of securities investigations, although it will ordinarily work collaboratively with other agencies that may be involved. Decisions about criminal charges, other than minor charges, will be made by the CDPP following referral from ASIC, and the CDPP will consult with ASIC in doing so.

  7. 4.Do the securities or related law enforcement authorities have investigatory powers? Can they bring administrative, civil or criminal proceedings? 
  8. Yes, ASIC has a broad range of investigatory powers, including powers to require production of records and information, and powers to compel people to answer questions under oath at an examination.

    ASIC can bring administrative, civil and criminal proceedings. In the case of criminal proceedings, ASIC will generally only prosecute minor criminal matters, and then otherwise refer more significant matters to the CDPP. Where ASIC refers matters to the CDPP, the CDPP has ultimate authority as to whether or not it will pursue those proceedings.

  9. 5.Are regulatory or criminal securities and related investigations public? Under what circumstances? 
  10. Generally speaking, ASIC and other relevant authorities keep the most serious criminal investigations private until the time of the first court appearance of an accused, at which time ASIC or the relevant authority may announce any charges that have been made. This is to prevent any regulatory outcomes being jeopardised. 

    Compulsory examinations conducted by ASIC during the course of an investigation are also required to be private: section 22 ASIC Act 2001 (Cth).

    Other investigations may be undertaken on a more public basis (for example, in relation to general market conduct in respect of non-financial risk). 

    ASIC also holds a general discretion as to whether to hold hearings relevant to the performance of its functions in public or private, except where legislation requires it to hold hearings in private.

  11. 6.Are regulatory or criminal securities and related investigations targeted at the company or the individuals involved, or both?
  12. Regulatory or criminal securities and related investigations can be targeted at companies, the individuals involved, or both.

    Investigation procedure

  13. 7.How do the securities and related law enforcement authorities typically begin an investigation?
  14. Having received information about potential misconduct (whether via reports from members of the public, ASIC's own monitoring and surveillance work, referrals from other regulators, or other sources) ASIC will assess whether the potential misconduct falls within its regulatory responsibility, and if yes, consider the extent of potential harm or loss, the type and seriousness of the conduct, and the costs and benefits of pursuing an investigation. It will also satisfy itself as to the requisite level of suspicion (discussed in answer to question 8) and then determine whether to pursue an investigation, and if so of what scope.

  15. 8.What level of suspicion of wrongdoing is required for the securities or related law enforcement authorities to begin an investigation?
  16. It is necessary for ASIC to have formed a suspicion that there has been a contravention of the Corporations Act 2001 (Cth) or other related legislation. Such a suspicion cannot be formed on mere speculation, but it does not need to be based on matters which would be admissible in evidence. In that sense, there is not a high test for ASIC to satisfy in order to investigate matters.

  17. 9.May the securities or related law enforcement authorities conduct dawn raids? Does this depend on the nature and seriousness of the allegations?
  18. Yes, ASIC or related law enforcement authorities can conduct dawn raids. Given the complexities and resources involved, dawn raids are generally only conducted when the nature and seriousness of the allegations is such that they are necessary (and, usually, where there is concern as to the preservation of relevant evidence). ASIC has in recent times worked with the Australian Federal Police in the execution of such raids.

  19. 10.

    Must the findings of a company's internal review be reported to the securities or related law enforcement authorities? When and under what circumstances?

  20. There is no general obligation on a company to report the findings of an internal review to ASIC, although it is open to a company to voluntarily provide such findings to ASIC. ASIC may seek production of reports of such reviews via its compulsory powers. However, a company would only be required to produce a report of an internal review in response to a compulsory notice if the report was not legally privileged, or if the company chose to waive legal privilege otherwise attaching to the report. 

    Holders of Australian financial services licences have certain statutory obligations to report significant breaches of their licence obligations upon becoming aware of those breaches.

  21. 11.Are whistleblowers a frequent source of information for securities and related investigations? 
  22. Information from members of the public is one source of information from which ASIC may determine to institute an investigation. 

    Australia's whistleblower protection laws have recently been strengthened, which may result in whistleblowers becoming a proportionately larger source of information on which securities investigations are founded.

  23. 12.Describe the typical phases of a securities or related investigation in your country.
  24. Once ASIC has determined to commence an investigation, it will seek to gather information about the subject of that investigation either informally (that is, by requesting that relevant persons and entities provide information and assistance voluntarily), or by using its compulsory powers to compel production of documents, and to compel individuals to attend examinations to give evidence to ASIC under oath. Depending on the complexity of the circumstances being investigated, that information gathering phase may be a lengthy one. 

    After the information gathered by ASIC has been analysed, ASIC will determine whether to commence proceedings or take other enforcement action for identified breaches of law; or alternatively to conclude its investigation without taking further action. Resolution of investigations is discussed in further detail in the answers to the questions below.

  25. 13.What are the mechanisms by which a securities or related law enforcement authority may cooperate and coordinate with authorities outside your jurisdiction?
  26. ASIC cooperates and coordinates with a number of international organisations, regulators and law enforcement agencies pursuant to a range of memoranda of understandings and pursuant to certain legislation.

    Relevantly, ASIC is a signatory to the International Organization of Securities Commissions (IOSCO) Multilateral Memorandum of Understanding and the IOSCO Enhanced Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information, as well as being a signatory to a range of direct MOUs with law enforcement agencies in various countries.

    ASIC also has powers under the Mutual Assistance in Business Regulation Act 1992 (Cth) to respond to requests from foreign regulators to obtain documents, information or evidence.

  27. 14.Will a securities or related law enforcement authority take into account findings by a law enforcement authority outside your jurisdiction in the course of its investigation?
  28. Whether or not ASIC takes into account findings of foreign law enforcement authorities in the course of its investigations will be at ASIC's discretion. As a practical matter, the relevance of, or weight given, to any finding by a foreign law enforcement authority will depend on the extent to which the facts on which that finding was based overlap with the facts relevant to ASIC's investigation, as well as procedural attributes of that finding (for example, whether it was made after the target of the finding had an opportunity to be heard or make submissions). Even so, findings of foreign law enforcement authorities will not be determinative of the outcome of any independent investigation conducted by ASIC.

    Document production

  29. 15.What can the securities and related law enforcement authorities require to be produced as part of an investigation? Do the powers of a regulator differ from those of the public prosecutor?
  30. ASIC may require the production of all documents relevant to the investigation, other than those documents or parts of documents subject to valid claims of legal professional privilege. It is ASIC, rather than the CDPP, that carries out investigatory functions such as calling for production of documents. The CDPP does not have investigatory powers.  

  31. 16.Will a litigation hold or will other instruction to preserve documentation need to be issued? When?
  32. There is no mandatory requirement to issue litigation holds or other instructions to preserve documents. However, it is good practice to do so on becoming aware of potential litigation or an investigation, given that destruction of evidence when litigation is pending, or while an investigation is on foot, can lead to severe penalties being imposed.

  33. 17.Can the securities and related law enforcement authorities request the production of materials protected by attorney-client privilege or work-product doctrine? Can the securities and related law enforcement authorities use protected materials if it obtains them from third parties?
  34. In Australia, documents can attract legal professional privilege where they were prepared for the dominant purpose of providing or obtaining legal advice (known as the 'advice privilege') or the dominant purpose of providing or obtaining professional legal services in existing or anticipated litigation in which a client is or may be a party (known as the 'litigation privilege'). 

    ASIC may request a party to provide documents that are protected by legal professional privilege, but it cannot compel a party to produce those documents if that party makes a legitimate claim for legal professional privilege.

    Likewise, a privilege holder may assert privilege in relation to materials obtained by ASIC from third parties. In the event of a valid claim, ASIC will not be able to use such materials to the extent they are covered by the claim.

  35. 18.How is confidential information or commercially sensitive information treated by the securities and related law enforcement authorities?
  36. Subject to limited exceptions, ASIC has an obligation under section 127 of the ASIC Act to take reasonable measures to protect confidential information from unauthorised use or disclosure.

    Parties producing documents to ASIC are able to identify to ASIC that they wish their documents remain confidential pursuant to this section. 

    Notwithstanding these provisions, it may be possible for third parties to seek production of such information pursuant to requests under freedom of information legislation, or via court orders. In those circumstances, the party whose confidential information is affected will usually have opportunities to make submissions about what restrictions on access should be applied.

  37. 19.Can the target of a document request exercise a right not to produce?
  38. If ASIC is exercising its statutory powers to compel the production of documents, the recipient of a statutory notice to produce will not ordinarily have any 'right' to refuse production of non-privileged documents otherwise in the recipient's possession or control. However, the recipient will be able to withhold from production documents subject to claims of legal professional privilege, as discussed in answer to question 17.

  39. 20.

    Do any data privacy, bank secrecy or other laws restrict the production of materials to a securities or related law enforcement authority in your jurisdiction? An authority outside your jurisdiction? May the company under investigation provide personal or bank customer data on a voluntary basis?

  40. Australian privacy and secrecy laws do not excuse compliance with compulsory notices to produce issued by ASIC. Ordinarily, however, companies do not provide personal or bank customer data to law enforcement agencies on a voluntary basis, including because that would likely be in breach of contractual obligations owed to the customer.

    Foreign law enforcement authorities will not ordinarily have authority to require production of materials from Australian persons without the involvement of an Australian authority or court. See also the answer to question 13.

  41. 21.Are there any data privacy, bank secrecy or other laws that restrict where documents or other communications may be stored or reviewed for the investigation?
  42. Australian companies must have appropriate security measures in place (ie, 'take reasonable steps') to protect any personal information they retain from misuse and loss and from unauthorised access, modification or disclosure. Australia's privacy laws also provide that unless certain limited exemptions apply, personal information may only be disclosed to an organisation outside of Australia where the Australian entity has taken reasonable steps to ensure that the overseas recipient does not breach Australian privacy principles in relation to the personal information. However, there are exceptions to this requirement where the foreign recipient of the information is subject to a law or binding scheme which effectively provides for an equivalent level of protection to that available in Australia, or where the disclosure to the foreign recipient is required or authorised by law or a court order.

  43. 22.Are the securities and related law enforcement authorities able to obtain documents from outside the country?
  44. It may be possible for ASIC to obtain documents located outside Australia, either by way of voluntary production, or through collaboration with law enforcement agencies in the foreign jurisdiction. See further the answer to question 13.

    Witness interviews

  45. 23.Will the securities and related law enforcement authorities conduct witness interviews? If so, will the interviews be on the record? Will the interviews be made public?
  46. As noted in answer to question 12, ASIC has statutory powers to compel witness testimony under oath. If it exercises those powers, examination of the witness will be conducted formally and a transcript made. The examinations are conducted in private and ASIC will often require the witness (and any legal representative of the witness attending the examination) to undertake to keep the contents of the examination confidential for specified periods of time or until released by ASIC.

  47. 24.Can witnesses exercise a right not to testify? Will any adverse inference be drawn if they do so?
  48. No, a witness cannot refuse to attend a compulsory examination and cannot refuse to answer questions put to the witness during that examination.

  49. 25.Do witnesses receive separate counsel? Who provides counsel for witnesses?
  50. Witnesses attending compulsory examinations before ASIC are entitled to have a legal representative present at the examination. Depending on the context, sometimes the employer or former employer of the witness may arrange that representation for the witness. Otherwise the witness may source legal representation themselves.

    Advocacy

  51. 26.Can the target of a securities or related investigation challenge the investigation in court while the investigation is ongoing?
  52. It is open to the target of an investigation to (for example) challenge the validity of compulsory notices requiring production of documents, on the basis that the documents required go beyond what could be relevant to the suspected contraventions being investigated by ASIC. It is difficult to conduct such challenges successfully given the broad nature of ASIC's information gathering powers.

    Likewise, given the breadth of ASIC's investigatory powers, it would be very difficult to challenge ASIC's decision to initiate an investigation or the scope of the investigation it selected. 

    ASIC's decision to initiate an investigation is only challengeable in court in very limited circumstances (generally, if a party can show that ASIC does not in fact suspect a contravention of the law), and the decision to investigate is not a matter that can be reviewed by the Administrative Appeals Tribunal (known as the AAT).

  53. 27.What opportunity will there be to respond to a securities or related law enforcement authority’s theories or allegations prior to the authority bringing charges?
  54. Persons relevant to ASIC's investigations may be compelled to answer questions during a formal private examination; see the answer to question 23, and can put forward their version of events in the course of such examinations.

    Persons of interest will also ordinarily be provided an opportunity, prior to the laying of criminal charges, to explain their conduct and put forward their version of events. This may be via a formal voluntary interview, and a caution will be given that information provided this way may be used in evidence against the person. 

    It is also open to parties to initiate an early guilty plea for specified offences (typically accompanied by the disclosure of relevant information, and ongoing cooperation with ASIC and the CDPP).

  55. 28.

    What form does the advocacy with a securities or related law enforcement authority typically take? 

  56. See the answer to question 27.

  57. 29.Are statements or advocacy positions taken by an investigated party during the investigation process deemed admissions and binding in future proceedings? Would such statements be made public?
  58. Examinees compelled to attend examinations must answer questions put to them in those examinations. However, if privilege is claimed prior to doing so, ASIC cannot use those answers in evidence in criminal or civil penalty proceedings against the examinee.

    See otherwise the answer to question 27.

    Timing

  59. 30.What is the limitation period for charges for securities and related violations?
  60. The limitation period for most securities and related violations is six years after the day of the relevant violation: see section 1325 (2) and (4) of the Corporations Act 2001 (Cth).

  61. 31.When does the limitation period begin to run?
  62. As set out above, the limitation period begins to run on the day after the relevant violation occurred.

  63. 32.What can suspend the running of the limitation period? Can the securities and related law enforcement authorities request a tolling agreement?
  64. If ASIC has determined to commence proceedings, it will usually strive to initiate those proceedings prior to the expiry of any applicable limitation period. Tolling agreements are not used.

  65. 33.How long does a securities or related investigation typically take?
  66. It is not possible to definitively identify a typical length of an ASIC investigation, as this will largely turn on the facts and issues being investigated and the complexity of the matter generally.

    With that said, ASIC does publish annual performance statements which list the average time to complete an investigation. The 2017–2018 ASIC annual report listed an average investigation time of 24 months.

    Resolution

  67. 34.What is the process for closing an investigation if the investigation does not reveal a violation of securities or related laws? Will the securities or related law enforcement authorities provide written confirmation that the investigation is closed without action?
  68. If ASIC determines not to pursue remedies after having conducted an investigation, it will where possible provide written notification to affected persons that the investigation is terminated without action.

  69. 35.How will the resolution or settlement process be initiated?
  70. For resolution without action: see the answer to question 34. For settlement of civil penalty proceedings: see the answer to question 41.

  71. 36.Who decides whether to proceed with charges and what charges to select? 
  72. Other than for minor criminal matters that may be dealt with by ASIC, the CDPP has the discretion to choose whether criminal charges should be laid and if so, which charges should be laid.

    In practice, the CDPP will consult with ASIC about which charges to lay, particularly given that ASIC is tasked with preparing a brief for the CDPP in relation to the criminal conduct that has taken place.

  73. 37.What factors would a securities or related law enforcement authority consider in selecting charges and the severity of any penalty or fine?
  74. As set out in answer to question 36, the discretion to lay criminal charges rests with the CDPP.

    If the CDPP chooses to prosecute a matter, the charges laid by it will generally be the most serious disclosed by the evidence. However, certain factors may lead the CDPP to proceed with a charge that is not the most serious revealed by the evidence, for instance where there are probable lines of defence. The Prosecution Policy of the Commonwealth discusses the relevant considerations in detail. 

    ASIC determines whether to pursue 'civil penalty proceedings' which may result in the imposition of pecuniary penalties. This is an alternative to criminal proceedings and requires a lesser standard of proof than criminal proceedings, although higher standards of proof apply for certain aspects than is the case in ordinary civil cases, given the greater seriousness of allegations resulting in civil penalties. It is in ASIC's discretion whether to pursue such proceedings; that assessment will take into account whether in ASIC's assessment the requisite level of proof can be met. The quantum of any pecuniary penalty that may be imposed is a matter for the court, not ASIC.

  75. 38.What remedies can the securities or related law enforcement authorities consider? How are penalties calculated?
  76. There are wide-ranging remedies able to be pursued by ASIC, including punitive, protective, preservative, corrective, compensatory and negotiated resolution remedies.

    In assessing the appropriate remedy, ASIC considers questions such as:

    • What is the nature and seriousness of the misconduct?
    • What was the post-misconduct behaviour of the offender?
    • What is the strength of the case?
    • What impact will the remedy have on the target person or entity, the regulated population and the public?
    • Are there any mitigating factors?

    Recent legislative change in Australia has broadened the scope of matters that will attract penalties, and also given ASIC the power to pursue significantly harsher civil and criminal sanctions. 

    The maximum sanction applicable to a given violation will typically be specified by the legislative provision recording the obligation that has been violated. The maximum sanction, if criminal, can expressed as a term of imprisonment for individuals or criminal fines for companies. Penalties for breach of civil penalty provisions are calculated by reference to 'penalty units'. 

    Applicable fines can also be expressed as the higher of either a certain amount of 'penalty units', three times the value of the benefit derived or the detriment avoided, or in the case of companies, 10 per cent of their annual turnover. A penalty unit is a statutorily prescribed amount of money that increases under an indexation system from time to time.

    Courts have the discretion as to precisely what penalties should be imposed, taking into account all of the relevant circumstances, and using well-established principles.

  77. 39.Do illegal profits have to be disgorged, and if so, how are they determined?
  78. Currently, ASIC does not have specific powers concerning disgorgement of illegal profits.

    However, if a criminal contravention of a Commonwealth law has occurred, the Proceeds of Crime Act 2002 (Cth) provides a scheme for Commonwealth authorities to confiscate the proceeds of that crime. Ordinarily, proceedings for confiscation of proceeds of crime are conducted by the Australian Federal Police, often in parallel with criminal proceedings relating to the criminal violations in issue. The AFP will ordinarily work with ASIC in relation to such proceedings.

  79. 40.Can criminal charges be brought against companies in your jurisdiction for violations of securities and related laws?
  80.  Yes, criminal charges can be brought against companies for violations of securities and related laws.

  81. 41.

    Will the securities and related law enforcement authorities provide a reduced penalty for cooperation? What standard will the authorities use when taking into account any cooperation?

  82. ASIC may take into account any cooperation, and the timing, extent and quality of that cooperation (for example, the veracity of information provided), in considering which remedy to pursue, and whether to pursue a remedy at all.

    If civil penalty proceedings are pursued, it is for the court to determine the penalty to be applied. If a party cooperates with ASIC to settle civil penalty proceedings, that process will generally involve providing the court with an agreed declaration of contravention, an agreed set of orders (including orders in relation to penalties, proposing a penalty amount), an agreed statement of facts that support the contravention, joint or agreed submissions in support of the proposed orders and a summary of the penalty or disqualification orders made by the courts in similar proceedings. 

    The court will consider that material in determining the appropriate penalty.  It will not necessarily simply adopt the quantum proposed by ASIC and the respondent. Some of the discretionary matters that a court can take into account include the nature and circumstances of the contravention, the degree to which contrition has been demonstrated (including any reparation paid for loss or damage), any cooperation with law enforcement agencies in the investigation of the contravention and whether or not any party has admitted contraventions of the law.  

    In relation to criminal matters, the CDPP will take into account cooperation (and the timing, extent and quality of that cooperation) as one factor in determining whether to lay charges at all. If charges are laid and a company or individual is found guilty, their cooperation is a factor that must be taken into account by the court in sentencing. There is no pre-specification of precisely how a given degree of cooperation may impact the sentence otherwise awarded.

  83. 42.Are deferred prosecution agreements or non-prosecution agreements permitted?
  84. No, currently Australia does not have a deferred prosecution agreement regime, or a non-prosecution agreement regime. However, draft legislation giving effect to deferred prosecution agreements is set to be re-introduced to the Federal Parliament during the course of 2019, so this area should be carefully monitored.

    ASIC is able to accept an 'enforceable undertaking' (EU) as an alternative to civil court action or certain administrative actions. Similarly, ASIC is able to issue infringement notices which have the effect of barring further legal action upon a penalty in the infringement notice being paid. During the 2018 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, ASIC was heavily criticised for too readily entering EUs and issuing infringement notices in circumstances where a company simply acknowledged ASIC's concerns about its alleged misconduct (as opposed to admitting that misconduct occurred). ASIC has since publicly taken a 'why not litigate' posture in relation to contraventions of the law, and received significant additional funding to follow through with that posture.

    Accordingly, companies should not assume EUs or infringement notices are as likely to be available as they previously may have been. 

  85. 43.Will a court need to approve the settlement agreement with a securities or related law enforcement authority?
  86. Courts are required to approve the resolution of civil penalty proceedings, as discussed in answer to question 41.

    As set out in question 42, Australia does not currently have a deferred prosecution agreement regime for Commonwealth crimes. However, draft legislation that was previously introduced to the Federal Parliament envisaged that the approval of a DPA would be given by a retired judicial officer selected for that purpose, rather than a court.

  87. 44.If a settlement occurs, will an admission to certain facts or wrongdoing be required?
  88. ASIC will ordinarily require that the agreed statement of facts that supports the presentation of proposed resolution of civil penalty proceedings contains relevant admissions.

    As for criminal proceedings, while Australia does not currently have a deferred prosecution agreement regime, the proposed DPA legislation previously introduced into Parliament required a corporation to admit to certain facts as a prerequisite to obtaining a DPA.

  89. 45.Can the findings or decisions of the securities or related law enforcement authorities be administratively appealed? Appealed to a court?
  90. Yes, some of ASIC's decisions can be reviewed by the AAT, which has the power to confirm, vary or set aside and replace those decisions. However, a number of categories of ASIC decisions are excluded from review in this way.

  91. 46.If a decision can be administratively or judicially appealed, what are the consequences of an adverse decision on appeal? What are the consequences of a positive decision on appeal? 
  92. As set out in answer to question 45, the AAT has the power to confirm, vary or set aside and replace certain of ASIC's decisions. 

    A party may appeal a decision of the AAT to a higher court, such as the Federal Court, but only about a question of law and not about a question of fact. 

    Collateral consequences

  93. 47.

    What are some of the collateral consequences of a resolution or settlement with a securities or related law enforcement authority? 

  94. If the resolution or settlement impacts an Australian listed company, it may have obligations to make disclosure to the market in accordance with continuing disclosure obligations and ASX listing rules.

    A resolution of civil penalty proceedings that involved imposition of a penalty may also have knock-on consequences for private litigation, such as private proceedings concerning the same or associated subject matter.

  95. 48.

    What are some of the collateral consequences of a conviction or the imposition of liability by a court?

  96. A conviction will usually result in a sentencing outcome of a fine or imprisonment, of a kind commensurate with the nature of the offence for which the conviction was obtained. 

    Other potential collateral consequences may include associated remedies such as disqualification from managing a corporation, being banned from providing financial services or engaging in credit activities. 

    The conviction or imposition of liability in proceedings brought by ASIC may also have knock-on consequences for private litigation such as class actions concerning the same subject matter.

  97. 49.Can private securities or related legal claims proceed parallel to investigations by securities and related law enforcement authorities?
  98. Yes. For example, it is common for securities class action plaintiffs to seek to use material gathered by ASIC in investigations, in furtherance of their claims in the securities class action.

    Note that if such material is sought while an investigation is ongoing, ASIC may seek to resist the provision of those materials on the basis of public interest immunity (that is, that disclosure is contrary to the public interest and may jeopardise the investigation).

  99. 50.What effect will findings by an authority in another jurisdiction have in private proceedings?
  100. Findings by a foreign authority will not ordinarily be determinative of positions in private proceedings. As a practical matter, the relevance of, or weight given, to any finding by a foreign law enforcement authority will depend on the extent to which the facts on which that finding was based overlap with the facts relevant to the Australian private proceeding, as well as procedural attributes of that finding (for example, whether it was made after the target of the finding had an opportunity to be heard or make submissions).

  101. 51.Can private plaintiffs obtain access to the files or documents the securities or related law enforcement authorities collected during the investigation?
  102. Yes; see question 49.

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Questions

    Regulatory environment

  1. 1.What are your country’s primary securities or related law enforcement authorities? 
  2. 2.What are the principal violations or legal issues that the securities or related law enforcement authorities investigate?
  3. 3.If there is more than one authority involved in a securities or related investigation, how is jurisdiction allocated? What is the interplay between the securities regulator and the public prosecutor?
  4. 4.Do the securities or related law enforcement authorities have investigatory powers? Can they bring administrative, civil or criminal proceedings? 
  5. 5.Are regulatory or criminal securities and related investigations public? Under what circumstances? 
  6. 6.Are regulatory or criminal securities and related investigations targeted at the company or the individuals involved, or both?
  7. Investigation procedure

  8. 7.How do the securities and related law enforcement authorities typically begin an investigation?
  9. 8.What level of suspicion of wrongdoing is required for the securities or related law enforcement authorities to begin an investigation?
  10. 9.May the securities or related law enforcement authorities conduct dawn raids? Does this depend on the nature and seriousness of the allegations?
  11. 10.

    Must the findings of a company's internal review be reported to the securities or related law enforcement authorities? When and under what circumstances?


  12. 11.Are whistleblowers a frequent source of information for securities and related investigations? 
  13. 12.Describe the typical phases of a securities or related investigation in your country.
  14. 13.What are the mechanisms by which a securities or related law enforcement authority may cooperate and coordinate with authorities outside your jurisdiction?
  15. 14.Will a securities or related law enforcement authority take into account findings by a law enforcement authority outside your jurisdiction in the course of its investigation?
  16. Document production

  17. 15.What can the securities and related law enforcement authorities require to be produced as part of an investigation? Do the powers of a regulator differ from those of the public prosecutor?
  18. 16.Will a litigation hold or will other instruction to preserve documentation need to be issued? When?
  19. 17.Can the securities and related law enforcement authorities request the production of materials protected by attorney-client privilege or work-product doctrine? Can the securities and related law enforcement authorities use protected materials if it obtains them from third parties?
  20. 18.How is confidential information or commercially sensitive information treated by the securities and related law enforcement authorities?
  21. 19.Can the target of a document request exercise a right not to produce?
  22. 20.

    Do any data privacy, bank secrecy or other laws restrict the production of materials to a securities or related law enforcement authority in your jurisdiction? An authority outside your jurisdiction? May the company under investigation provide personal or bank customer data on a voluntary basis?


  23. 21.Are there any data privacy, bank secrecy or other laws that restrict where documents or other communications may be stored or reviewed for the investigation?
  24. 22.Are the securities and related law enforcement authorities able to obtain documents from outside the country?
  25. Witness interviews

  26. 23.Will the securities and related law enforcement authorities conduct witness interviews? If so, will the interviews be on the record? Will the interviews be made public?
  27. 24.Can witnesses exercise a right not to testify? Will any adverse inference be drawn if they do so?
  28. 25.Do witnesses receive separate counsel? Who provides counsel for witnesses?
  29. Advocacy

  30. 26.Can the target of a securities or related investigation challenge the investigation in court while the investigation is ongoing?
  31. 27.What opportunity will there be to respond to a securities or related law enforcement authority’s theories or allegations prior to the authority bringing charges?
  32. 28.

    What form does the advocacy with a securities or related law enforcement authority typically take? 


  33. 29.Are statements or advocacy positions taken by an investigated party during the investigation process deemed admissions and binding in future proceedings? Would such statements be made public?
  34. Timing

  35. 30.What is the limitation period for charges for securities and related violations?
  36. 31.When does the limitation period begin to run?
  37. 32.What can suspend the running of the limitation period? Can the securities and related law enforcement authorities request a tolling agreement?
  38. 33.How long does a securities or related investigation typically take?
  39. Resolution

  40. 34.What is the process for closing an investigation if the investigation does not reveal a violation of securities or related laws? Will the securities or related law enforcement authorities provide written confirmation that the investigation is closed without action?
  41. 35.How will the resolution or settlement process be initiated?
  42. 36.Who decides whether to proceed with charges and what charges to select? 
  43. 37.What factors would a securities or related law enforcement authority consider in selecting charges and the severity of any penalty or fine?
  44. 38.What remedies can the securities or related law enforcement authorities consider? How are penalties calculated?
  45. 39.Do illegal profits have to be disgorged, and if so, how are they determined?
  46. 40.Can criminal charges be brought against companies in your jurisdiction for violations of securities and related laws?
  47. 41.

    Will the securities and related law enforcement authorities provide a reduced penalty for cooperation? What standard will the authorities use when taking into account any cooperation?


  48. 42.Are deferred prosecution agreements or non-prosecution agreements permitted?
  49. 43.Will a court need to approve the settlement agreement with a securities or related law enforcement authority?
  50. 44.If a settlement occurs, will an admission to certain facts or wrongdoing be required?
  51. 45.Can the findings or decisions of the securities or related law enforcement authorities be administratively appealed? Appealed to a court?
  52. 46.If a decision can be administratively or judicially appealed, what are the consequences of an adverse decision on appeal? What are the consequences of a positive decision on appeal? 
  53. Collateral consequences

  54. 47.

    What are some of the collateral consequences of a resolution or settlement with a securities or related law enforcement authority? 


  55. 48.

    What are some of the collateral consequences of a conviction or the imposition of liability by a court?


  56. 49.Can private securities or related legal claims proceed parallel to investigations by securities and related law enforcement authorities?
  57. 50.What effect will findings by an authority in another jurisdiction have in private proceedings?
  58. 51.Can private plaintiffs obtain access to the files or documents the securities or related law enforcement authorities collected during the investigation?