Tougher penalties are needed to deter corporate crime, according to Australian Securities and Investments Commission (ASIC) Chairman Greg Medcraft.

“It is frustrating – both for us and the public – when the penalty available to respond to misconduct is much less than the profit someone made in the process,” he told a Senate committee hearing into the regulator’s performance.

“If this is so, then rational players in the market will routinely take that risk.”

Some comparable criminal offences attract different penalties, and some civil penalties are too lenient or do not cover a wide enough range of misconduct, he says.

In submissions to the inquiry ASIC has called for its investigation and enforcement powers to be strengthened.

It wants search-warrant powers streamlined and the level, consistency and availability of penalties reviewed.

“If the thinking of lawbreakers is a tussle between fear versus greed, then we need penalties that amplify the fear and smother the greed,” Mr Medcraft told the inquiry last week. “We need penalties that create a fear that overcomes any desire to take risks and break the law.”

Despite such barriers, ASIC has a strong record on enforcement, he says.

In the past three years its success rate in enforcement has been above 90%. Last financial year the regulator was successful in 100% of civil cases and 85% of criminal cases.

ASIC is also improving its work with whistleblowers, establishing liaison officers in all relevant teams and offering staff training in this area, Mr Medcraft says.

He has been disappointed at the inflammatory criticism of his staff in some submissions to the inquiry. “ASIC has exceptional employees. Considering the difficult job they do, they should receive appropriate respect.”

The regulator is more transparent than ever, with the publication of new enforcement reports and policies and new processes for reporting misconduct, Mr Medcraft argues.

ASIC has made four public submissions to the inquiry, one of which addresses its handling of alleged misconduct at Commonwealth Financial Planning.

It has recommended policy reform in several key areas, including better regulation of financial advice through national exams, extending the public register to cover employee advisers and strengthening ASIC’s licensing powers, allowing it to ban people from managing financial services businesses.