AAT backflips on appeal of banned adviser
The Administrative Appeals Tribunal (AAT) is upholding the Australian Securities and Investments Commission’s (ASIC) decision to ban former financial adviser Tony Davidof from providing financial advice for three years, after previously upholding a counter appeal.
Money Management previously reported that the AAT upheld an appeal by Davidof against the regulator’s decision to ban him after he was found to have engaged in manipulation of the price of MINI warrants - a type of derivative product traded on the Australian Securities Exchange (ASX), issued by Credit Suisse.
The decision against Davidof’s conduct that resulted in his ban in October 2015 followed investigation into the price manipulation events, which occurred in December 2012 and February 2013.
“The prices at which Davidof and another former employee were trading MINIs in 2013 were designed to transfer the profit/loss from all the preceding trading, without reflecting the SPI Futures that were actually traded and this was likely to have the effect of creating an artificial price for trading in the affected MINIs on the ASX,” Money Management reported in January.
The AAT has today affirmed the seriousness of the breach of conduct by both Davidof and former Credit Suisse employee, Philip McLean and acknowledged of the contravening of the Corporations Act 2001.
Davidof called for a review into ASIC’s decision to ban him from providing financial advice for a period of three years in January 2016, after the AAT upheld Davidof’s October 2015 appeal on the basis of MINIs not being defined as a financial product.
The Federal Court of Australia upheld ASIC’s finding appeal that MINIs were a financial product in June this year, and referred the matter back to the AAT.
“Mr Davidof was aware…that the forces of supply and demand did not govern the impugned transactions. He admits that they were designed only to transfer a profit or loss arising from other transactions,” the AAT said.
“Market manipulation is prohibited in order to further the objects of promoting confident and informed decision making by consumers of financial products and services, and fair, orderly and transparent markets for financial products.”
Credit Suisse ceased the trade of MINIs in October 2013.
Recommended for you
While the Financial Services and Credit Panel can take action on individual advisers’ misconduct, a compliance professional unpacks why the panel does not always subject licensees to further action.
Platform HUB24 has reported $100 billion funds under administration in its latest quarterly results, helped by a 90 per cent rise in platform net inflows.
Progressing digital advice and seeking breakeven in the advice division are part of AMP’s goals for the upcoming financial year as it approaches 1,000 financial advisers in its licensee.
The Rask Group, in partnership with InvestSMART’s new investment platform, has announced three ETF strategies, aimed at empowering financial advisers to create and manage their own ETF portfolios.
