The corporate regulator says Australia is too soft on white collar crime and that civil penalties here are a slap on the wrist compared to other parts of the world.
In a major report comparing penalties, the Australian Securities and Investments Commission (ASIC) says the rewards of corporate crime can often outweigh light penalties.
"Clearly what we found was with criminal penalties, we're reasonably consistent but in relation to civil and administrative penalties, we're actually somewhat inconsistent," commission chairman Greg Medcraft told ABC's AM.
Mr Medcraft says one of the big problems for ASIC is that penalties for corporate crime are often small in comparison to the proceeds of the crime.
A recent example is the insider trading case against the former Gunns chairman, John Gay.
"Often [internationally] the penalty is you get to disgorge your financial gain and in fact the concept in many jurisdictions is triple damages," Mr Medcraft said.
"You actually have a penalty that is three times your gain and if you think about it, that is actually what having a deterrent is all about is that if you wanted to consider breaking the law then there will be a significant penalty."
The report suggests that access to disgorgement laws, which allow the seizure of any ill-gotten gains of convicted corporate criminals, would improve the situation.
"Frankly, if in fact you are considering whether to break the law and it's a risk/reward decision, many people weigh up what the penalty will be or may be versus the gains to be obtained," Mr Medcraft said.
"And you've actually got to incent the right behaviour and those that intentionally break the law should be well aware that there's going to be a significantly adverse outcome and they won't get a financial gain.
"Now what we've got to have is penalties that actually inject fear and that overcome that urge perhaps to break the law via greed."
Currently the maximum civil penalty for crimes like insider trading and market manipulation in Australia is around $200,000.
ASIC says in Canada the equivalent penalty is around $1 million, and in the United States the penalty is three times the profit gained or loss avoided.
"What you have to do is have a system that makes it very clear that if you cross the line, there will be significant penalties and I think that is very important," Mr Medcraft said.
Mr Medcraft also confirmed ASIC is monitoring Leighton Holdings amid reports the company is sitting on undisclosed write-downs of more than $2 billion.
"Directors, under continuous disclosure, have an obligation that if it is a material fact that would have a significant impact on price or material impact on price, it is something that they need to disclose," Mr Medcraft said.
"What we'll do is see how they approach that issue."