Australian Securities and Investments Commission v Westpac Securities Administration Limited

The Australian Securities and Investments Commission (ASIC) brought an action against Westpac Securities Administration Limited, seeking pecuniary penalties for contraventions of section 961K of the Corporations Act 2001 (Cth). The Federal Court of Australia heard the case and found that Westpac had contravened the Act by failing to act in the best interests of its retail clients in relation to personal financial product advice. ASIC sought a total penalty of $10.5 million, comprising $7.5 million for the first defendant and $3 million for the second defendant. Westpac did not oppose the penalties sought by ASIC.

The court was required to determine whether the penalty sought by ASIC was appropriate in all the circumstances. The court considered the statutory and legal principles relevant to the imposition of civil penalties, including the purpose of deterrence and the principles of "course of conduct" and "totality." The court also considered the evidence presented by the parties, including the affidavits of John Lawrence James David Cannons, who was employed by Westpac during the relevant period.

The court found that the penalty sought by ASIC was appropriate in all the circumstances. The court noted that the purpose of imposing civil penalties is to deter repetition of the contravening conduct by the contravener and to deter others who might be tempted to engage in similar contraventions. The court also considered the principles of "course of conduct" and "totality" in determining the appropriate penalty for the multiplicity of contraventions. The court concluded that the penalty sought by ASIC was sufficient to achieve the purpose of deterrence and was appropriate in all the circumstances.

Accordingly, the court made orders pursuant to section 1317G(1E) of the Corporations Act 2001 (Cth) that the first defendant pay to the Commonwealth an aggregate pecuniary penalty of $7,500,000 and that the second defendant pay to the Commonwealth an aggregate pecuniary penalty of $3,000,000. The defendants were also ordered to pay the plaintiff's costs of and incidental to the hearing as agreed or assessed.