Section 19 Notices

A section 19 notice under the Australian Securities and Investment Commission Act 2001 can be issued by the Australian Securities and Investment Commission (ASIC) to require a person to assist the agency in an investigation it is conducting including by being examined (through questioning in a formal setting).

A requirement under a section 19 notice is mandatory and failure to comply with it is an offence which can, in some circumstances, result in a prison sentence.

ASIC powers

Section 19 of the Act provides the power for ASIC to issue a notice if the agency, on reasonable grounds, suspects or believes that a person can give information relevant to an investigation. ASIC can require the person:

• to give to ASIC all reasonable assistance in connection with the investigation; and
• to appear before a specified member or staff member for examination on oath and to answer questions.

ASIC regularly requires company employees, spouses of directors, accountants and lawyers and other advisors to comply with a section 19 notice, including by undertaking a compulsory examination when they are investigating a company for potential offences or breaches of corporations law.

Do I have to comply with a section 19 notice?

Yes. You must comply with any requirement imposed under a section 19 notice, including attending a compulsory examination. You risk committing a criminal offence if you do not comply.

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 against their interests.

A lawyer can also serve to ensure that ASIC does not exceed its lawful authority in the questions it ask. ASIC is limited, by the particulars contained in the section 19 notice, in the topics it is entitled to ask questions about.

What rights do I have?

You must comply with the requirements of a section 19 notice but you do have some rights.

Importantly, you are entitled to be represented by a lawyer at a section 19 examination which means that, if you are required to attend to be questioned by an ASIC investigator, you can have a lawyer present. You are also entitled to obtain legal advice and/or representation when providing information, books or records, in compliance with a section 19 notice.

You are required to answer questions, or hand over books and records or other information, even if doing so would risk making you subject to a penalty. 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.

For advcie or representation in any legal matter, please contact Armstrong Legal.