At a Senate estimates hearing the next day, he said he wanted to "correct" the comments as reported, having received a phone call from Finance Minister Mathias Cormann expressing his concern.
The Sydney Morning Herald continues (some snippets):
It was the sort of startling and "courageous" comment rarely heard from a senior public servant.
Greg Medcraft, the chairman of the Australian Securities and Investments Commission, may well be regretting his since-retracted statement this week that Australia was a "bit of a paradise" for white-collar crime.
But if his aim was to attract attention to the issue of penalties for corporate wrongdoing in Australia, his lapse into frankness may well have done the trick.
Medcraft has been pushing for months for tougher penalties in this area. In February, he told a Senate committee that Australia's penalties were inadequate, with the criminal sanctions inconsistent and civil fines set too low.
When it came to deterring white-collar crimes, Medcraft said, "you have to lift the fear and suppress the greed".
"The thing that scares white-collar criminals is going to jail, and that's what scares them everywhere in the world.
"The penalties, particularly civil penalties, in Australia for white-collar offences are basically not strong enough, not tough enough."
Nationals senator John Williams, an outspoken critic of the financial advice sector who has pushed for widescale reform, told the hearing: "I've said for 5½ years that we should have a royal commission into white-collar crime because I believe Australia is, today, a paradise for white-collar crime."
Some argue ASIC could make better use of the penalties available to it – that the problem is one of enforcement.
"In some cases it's true that Australia's maximum penalties can be less than the maximum penalties overseas," said corporate law expert Juliette Overland from Sydney University.
She agrees that there is a "good argument" for more consistency in sentencing of corporate wrongdoing in Australia.
But she says the focus should be on "deterrence up front, and the idea that if you engage in this conduct you will get caught", she said.
"The biggest problem with a lot of corporate crime is that it's so hard to uncover … if people think it's only a small chance you will get caught, they might still think it's worth a try."
The above is all very relevant in the Malaysian context. Ten, twenty years ago enforcement of white-collar crimes was virtually non-existent. I am pretty sure that some corporate "players" refer to this as "the good old time".
The good news is, things have clearly improved: more enforcement, and even some jail sentences. There is also much more transparency for investors these days, enabling them to stay away from "dodgy" companies and their insiders. That is, if investors do their homework.
But still, the glass is half full, there are many cases where the alleged perpetrators seem to get away with their loot, or receive at best a much delayed slap on the wrist.
Good enforcement should have the following characteristics:
- a high chance that the perpetrators will be caught;
- the punishment itself should be an adequate deterrent;
- the whole process should be relatively fast (justice delayed is justice denied), this includes a fast response to credible complaints received from the public;
- non-biased, it should not be that certain VIPs appear to be above the law;
- transparent, both regarding the backgrounds of the enforcements, but also when no action is taken in cases where it seems that rules might have been broken.
Malaysia can still clearly improve on the above.