5.2 ASIC

ASIC has the power to investigate complaints, or suspected breaches of the Act, and to pursue a variety of enforcement remedies, depending upon the seriousness and consequences of the misconduct. Enforcement action may include prosecution and the imposition of punitive penalties, or orders requiring the payment of compensation.

If a person operates an unregistered managed investment scheme that is otherwise required to be registered, then there are adverse consequences that may apply, including:

  1. a maximum penalty for individuals of 200 penalty unit points ($22,000) or five years imprisonment, or both, or a maximum penalty for corporations of 1,000 penalty units ($110,000);
  2. upon application to the court by either ASIC, the person operating the scheme, or a member of the scheme, the court may order that the unregistered scheme be wound up [See Section 601EE];
  3. where a court finds that an investor has suffered, or is likely to suffer loss or damage because of the contravention, the court may make orders to compensate that investor for such loss or damage [See Section 1325]; and
  4. a contract entered into by an investor to subscribe for interests is voidable at the option of the investor [See Section 601MB].