Negotiated Enforcement: Regulatory Power and Corporate Misconduct in the Financial Sector Project

Overview

Enforcement outcomes are often the result of negotiations between regulators and alleged wrongdoers. These negotiations may, for example, result in the regulator not pursuing litigation against the alleged wrongdoer and, in return for acknowledging past misconduct and some form of promise in relation to future conduct, the alleged wrongdoer receives a reduced sanction. Regulators rely on negotiations with alleged wrongdoers to respond to misconduct, impose sanctions and promote responsible behaviour. However, there is concern about the increasing preference of regulators to use negotiated enforcement rather than litigation to counter serious misconduct in the financial sector. An over reliance on negotiated enforcement raises concern where these practices: lack transparency; are inefficient; fail to deter misbehaviour; and operate to subvert individual justice. This project evaluates these issues by examining enforcement strategies by the Australian Securities and Investments Commission (ASIC) that involve negotiations with alleged wrongdoers and the factors that are relevant to ASIC when it pursues negotiations.


Grant Information

Type of grant: Australian Research Council Discovery Grant

Funds allocated: $311,000

Researcher: Professor Ian Ramsay  (Chief Investigator)


Publications