Asic v Vizard- Case Study
University: Australian National University
Question :
Corporation law merely deals with all the rights and duties of the company and also states the rules and conducts which are made for the smooth running of the organisation. This mainly implies that all companies are bound to follow the legislation. Corporation plays a major role in the funding of the company and also establish an emphasis on the governance of the corporation. As all the financial dealing of the organisations are considered under corporate law. The Australian Securities and Investments Commission (ASIC) is a national corporate board which deals with the consumers and their rights variably for the corporation all the dealings and matters in respect of corporate governance is considered under it.
- What is the impact of corporation law on companies?
- Explain the consequences of breach done by a director with the company?
- What was the impact over ASIC after this case?
Answer :
Background
The Australian Securities and Investments Commission was founded on 1 July 1998, It mainly does regulate the national corporate as it is an independent commission which manages all the financial services by enforcing the law. It also protects the right of investors, consumers and creditors. It gives a report to the Treasure and contains all the information regarding the financial analysis of all the companies, organisation and corporations dealing with a certain kind of business and any professional work. They mainly deal with consumer protection rights with all the insurance and the deposits being taken by them. ASIC's covers all the major areas responsible for the corporate world that includes Financial services and literacy, corporate governance, securities, insurance etc.
Facts
Vizard works in Telstra as a non-executive director as he was on a dominant position Vizard knew all the access so he misused his position by accessing the high classified information which was covered under the briefing document internally and also in the board meetings where he used that information to get the benefit for him and his family in the separate occasion of year 2000. The document which was being accessed by Vizard has covered all the details about the information technology firm of schemes and benefits plan made by them. Lateron, he purchased all the shares in firms which Telstra was planning to buy and also created his own family trust on his own name which was managed by the the accountant he appointed. He purcahsed shares of firm which was prominent on that time which are Computer share limited, Sausage Ltd and also Key corp Ltd. And for all this Vizard has not use fund of Telstra. When this came in the notice of The Australian Securities and Investments Commission they made a proceeding against Vizard under section 183 Breach of the Corporation Act.
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Issue raised
- Vizard has misused his position and breached his duty by using the corporate information for his benefit covered under section 232(5) and 183(1) of corporation Act.
- Gain an advantage from the information and used it for their own benefit by misconducting the position and trust of the company.
Decision/ Judgement
The Australian Securities and Investments Commission clarified that their was a breach from Vizards side and he admitted that after all the evidence were proofed on his record. Vizard was held liable under section 183 and 283 of Corporation Act and was amounted to pay $200,000 as a penalty with that he was terminated from the position of Director and was being disqualified for 10 years.
Reason for Judgement
The Australian Securities and Investments Commission embarks that Vizard has been covered under Regulatory offences as he has leaked and use certain information which is being made just for the use of company and their implies certain norms that such kind of information can not be moved to the public and Vizard has by his full knowledge made that information out from the company for his own good. Thus, even it has not created any harm to the company but giving any confidential information of the company and misusing it for its own benefit is a crime.
Vizard has misused his position and has been covered under white collar corporate crime as he for his own personal gain conducted such crime and being a director of the company it is the foremost duty of the person that he should try to gain more profit for the company and should not adhere any profit for themselves.
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The Australian Securities and Investments Commission has made it clear that vizard has done breach of trust even after having a full knowledge of the act which was being done by him he misused that position and made use of confidential information for his personal gain.
By this case their came a major change in the system of ASIC's as they had made a close end check from them on all the information technology sectors and with that it was variably made that certain breach is not admitted and the person doing this will get maximum punishment.
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