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A Compulsory Examination under section 19 Australian Securities and Investments Commission Act is conducted in private and gives the Australian Securities and Investment Commission ("ASIC") the power to ask a person questions about a matter which it is investigating, or is to investigate.
If you are required, by a section 19 Notice, to attend an Examination you must do so, a failure to attend or to answer questions honestly is an offence which is very regularly prosecuted by ASIC and can, in some circumstances, result in a prison sentence.
Before you attend a section 19 Compulsory Examination it is extremely important that you consult a lawyer who is experienced in these kinds of matters. Armstrong Legal’s team of lawyers, led by Managing Partner and Accredited Specialist John Sutton, have substantial experience in the conduct of section 19 examinations and our firm is very well positioned to assist you in the area.
You will attend a location specified by ASIC, normally one of their offices, where you will be ushered into a room by yourself, or with your lawyer. Nobody other than you, your lawyer, and ASIC staff (including the examiner) are allowed to be present during the examination unless ASIC gives them permission to be there.
At the start of the Examination, you will be given a number of warnings. One of them relates to confidentiality. You will be forbidden from discussing your interview with anyone for a period of time (usually 6-12 months) after the Examination. This will not apply to discussing the matter with your lawyer if they are present. If they are not, then you should ask that the confidentiality notice be altered to allow you to discuss your interview with your named lawyer.
During the Examination, ASIC will ask you questions which relate to their investigation and you will be obliged to answer them. If you have a lawyer with you, they may ask you questions as well – this can often be helpful if the stress of the questioning becomes overwhelming or if the ASIC examiner’s questions are unlawful.
There is no inherent privilege against self-incrimination in a section 19 Examination. You are required to answer a question even if doing so will expose you to a risk of a penalty being imposed on you.
You are, however, entitled to claim that an answer to a question would expose you to a risk of a penalty before you give that answer. If you do this, your answer cannot later be used against you as evidence in a criminal proceeding or a proceeding to impose a penalty.
In practice, you should say the word ‘privilege’ before giving an answer to a question in a section 19 examination. Doing so will preserve your position against self-incrimination.
For clarity, you are required to give self-incriminatory answers, but providing you correctly claim privilege those answers cannot be used as evidence against you.
A lawyer is the only person who is entitled to attend a section 19 Examination with you (unless ASIC gives permission for someone else to attend with you). It is a very good idea to have a lawyer present with you during an Examination because, often, ASIC’s method of questioning can cause an examinee to become overwhelmed and to make statements which are unnecessarily against their interests.
A lawyer can also serve to ensure that ASIC do not exceed their lawful authority in the questions they answer. ASIC are limited, by the particulars contained in their section 19 Notice, in the topics that they are entitled to ask questions about. Many times, a layperson will not be familiar with this rule which will allow ASIC to stray in their questioning and to invite an examinee to, illegally, prejudice their interests.
You will be sent a transcript of the Examination after it is completed and you will be asked to sign it. You have an obligation to review it, correct any typographical or clerical errors and to sign it. It may be used in evidence against you or other people in civil or criminal proceedings so it is important you check it for accuracy. Any answers over which you claimed privilege will not be able to be used against you in criminal, or penalty, proceedings so this is the first thing you, or your lawyer, should check has been recorded correctly.
If upon reading the transcript or through some other method, you become aware that you have made a mistake in any of the answers you have given, you should clarify this with ASIC in writing as soon as possible. It is highly advisable that this clarification is made through a lawyer.
The process of an s.19 Examination can be daunting and should never be taken lightly. In our experience, taking a lawyer with knowledge and expertise in this area, to the Examination is highly advisable. The team at Armstrong Legal stand ready to assist you in this regard.
If you suspect that you may be under investigation, or if you have been charged with an offence, it is vital to get competent legal advice as early as possible. Our lawyers are highly specialised in corporate crime and will be able to guide you through the process while dealing with the various authorities related to your matter.