First infringement notice sheds light on continuous disclosure regime.(NEWS AND VIEWS)

* Listed entities are now on notice that ASIC will issue infringement notices in appropriate cases

* Paying a fine is not an admission of guilt, but it could lead to claims of financial loss by investors

* Complying with an infringement notice offers tactical advantages for companies because it limits the potential for more serious court action. However, ASIC can publicise the fact that a company has complied with a notice, which could fuel investor litigation

Since 1 July 2004, the Australian Securities and Investments Commission (ASIC) has had the power to issue infringement notices for breaches of continuous disclosure obligations under the Corporations Act. Infringement notices can impose fines and/or require the disclosure of specified information. If a notice is issued, the company can either pay the fine or risk being pursued through the courts by ASIC. These notices were a controversial addition to ASIC's powers, as they put ASIC in the role of both prosecutor and judge.

ASIC recently announced that it had issued its first infringement notice, a $33,000 fine for Solbec Pharmaceutical Limited (Solbec), which has elected to pay the fine. This first use of the infringement notice power clearly puts all listed entities on notice that ASIC will indeed use its power to issue infringement notices when the appropriate circumstances arise. …