Section 19 Examinations

A Compulsory Examination under section 19 of the Australian Securities and Investments Commission Act 2001 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 then you must do so. A failure to attend or to answer questions honestly is an offence which is regularly prosecuted by ASIC and can, in some circumstances, result in a prison sentence.

What happens in a section 19 examination?

You will attend a location specified by ASIC, normally one of its 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) is 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 warnings. One of them relates to confidentiality. You will be forbidden to discuss your interview with anyone for a period of time (usually 6-12 months) after the examination. This will not apply to discussions 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 its 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.

Privilege against self-incrimination

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 that may incriminate you in a section 19 examination. Doing so will preserve your position against self-incrimination.

Do I need a lawyer when attending a section 19 examination?

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 happens after a section 19 examination?

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.

What should I do if I have received a notice?

The process of a section 19 examination can be daunting and should never be taken lightly. In our experience, enlisting a lawyer with knowledge and expertise in this area is highly advisable.

If you require legal advice or representation in any legal matter, please contact Armstrong Legal.