No Right of Silence with ASIC Notice of Examination

When ASIC investigators give you a notice of examination it means they believe you have information which will help them in an investigation. You do not have the “right of silence”.

The Situation

A businessman who had had dealings with a particular Company and had purchased a substantial amount of goods and services from it and was then issued a notice under Section 19 of the Australian Securities and Investments Commission Act 2001 (the ‘ASIC Act’) requiring the businessman to appear for examination on oath and answer questions put to him by ASIC investigators.

ASIC Power

ASIC has the power to require a person to attend to be examined if it believes, on reasonably grounds, or suspects or believes that a particular person can give information relevant to a matter that it is investigating under Division 1 of Part 3 of the ASIC Act.

The notice to the proposed person to be examined may require them  to give ASIC all reasonably assistance in connection with their investigation; including answering questions put to them by the ASIC investigators or deliver up documents.

What Protections do you have?

There are limited protections afforded to the examinee.  Unlike the police, you do not have an unqualified “right” to silence.  If you refuse to answer or provide this responsible assistance you may be liable for contempt of ASIC or contempt of the ASIC Act and liable for substantial penalties.  You are permitted to take a lawyer with you to attend the examination and you are permitted to claim the protection under Section 128 of the Evidence Act 1995 (Cth) in respect of privilege against self-incrimination.

Section 68(3) of the ASIC Act limits the scope of the protection against self-incrimination and excludes the proceedings specified in Section 1349 of the Corporations Act 2001.

You may maintain the protection in respect of Solicitor Client Legal Professional Privilege.

How does The Examination work?

Section 22 provides that the examination is to be in private and often the ASIC investigator will provide a direction that no question, information, document or anything related thereto can be discussed to any other person for a period of in access of a year.  

Evidence will be required to be provided under oath or affirmation and failure to comply without reasonable excuse will expose the person to a penalty of $11,000.00 or 2 years in prison or both. Often there is a record of the examination and Section 24 provides that there may be a transcript and if this transcript is reduced to writing a copy will be provided to the examinee who may be required to read it and sign it.

In some cases you will not even be able to tell your business colleagues why you were required to be out of the office for the day!

Comments from Mark Streeter – Sydney fraud lawyer

There are important lessons to be learnt. Treat this examination process very seriously. If you are in receipt of a notice of examination you should immediately seek independent legal advice

You should not rely this information memorandum as anything but general information.

Written by Mark Streeter

The Director of Streeterlaw, Mark has been practicing Law since 1994. He has attained his Masters of Law in 1999 and in 2006 was awarded his Specialist Accreditation in Commercial Litigation. Mark is a member of ARITA, a graduate of the AICD and a member of AICM. A member of STEP, Mark enjoys working in the area of Wills and Estates. In 2020 Mark is the Chair of STEP NSW.

Call us on 02 8197 0105 to book an appointment with Mark Streeter!