Civil Sanction is a recent enforcement power added by the Securities and Exchange Act (No. 5) B.E. 2559 (2016) and the Emergency Decree on Digital Asset Businesses of 2018 in order to improve efficiency of law enforcement.
Section 317/1 of the amended SEA allows the following offences to be prosecuted by a civil sanction:
(1) committing unfair securities trading practice;
(2) presenting a false statement or concealing material facts that should have been stated;
(3) failing to perform duties as director or executive under Section 89/7;
(4) allowing any person to use one's own securities trading account or banking account for payment of securities trading, or using any person's securities trading account or banking account.
Section 96 of the Emergency Decree on Digital Asset Businesses of 2018:
(1) presenting a false statement or concealing material facts that should have been stated;
(2) committing unfair digital asset trading practice
(3) allowing any other person to use a digital asset trading account, bank account, account opened with a digital asset business operator or any other account for making payment in relation to digital asset trading, or using a digital asset trading account, bank account, account opened with a digital asset business or any other account of any other person.
Civil penalty can be imposed when the SEC is granted an approval of the Civil Sanction Committee, which comprises five members, namely:
(1) the Attorney-General;
(2) the Permanent Secretary of the Ministry of Finance;
(3) the Director-General of the Department of Special Investigation;
(4) the Governor of the Bank of Thailand; and
(5) the Secretary-General of the SEC.
In addition to the approval for the imposition of civil sanction, the Civil Sanction Committee has the duty to consider and determine an appropriate civil sanction to be imposed on the offender. There are five types of civil sanctions, namely:
(2) a compensation at an equal amount to the benefit received or should have been received from committing an offence;
(3) a suspension of securities or derivatives trading for a period not exceeding five years;
(4) a bar from serving as a director or executive in a listed company or a securities company for a period not exceeding 10 years;
(5) a reimbursement of investigative expenses incurred by the SEC.
In any case, the Civil Sanction Committee shall determine a sanction appropriate for the presented facts of each case, and the imposition of all five sanctions in all cases is not required.
In the case where the offender agrees to comply with the civil penalty specified by the Civil Sanction Committee, such offender must sign a letter of consent. After the offender has made a payment of pecuniary sanction in full, the right to institute a criminal prosecution shall extinguish. In contrast, in case of the failure to make the payment in full, the SEC shall file a petition with a civil court for enforcement in accordance with the letter of consent.
On the other hand, where the offender refuses to comply with the specified civil penalty, the SEC Office shall bring an action against the offender in the Civil Court for consideration and imposition of civil sanction. The proceedings and enforcement steps in such case are subject to the Civil Procedure Code.
In this regard, the civil penalty and the compensation at an equal amount to the benefit received or should have been received from committing an offence along with the interest arising from such money shall be remitted to the Ministry of Finance as state revenue under Section 317/12 of the amended SEA and Section 99 of the Emergency Decree on Digital Asset Businesses of 2018.
Under the terms of the letter of consent or the court's decision that specify a suspension of trading or a bar from serving as a director or executive in a listed company or a securities company, the failure to comply with such terms or decision shall be considered commission of another criminal offence.