The corporate regulator has cancelled the Australian Financial Services Licence (AFSL) of a firm after it failed to pay AFCA determinations against it.
ASIC announced that it has cancelled the AFSL of Viridian Equity Group Pty Ltd (Viridian Equity) following the Compensation Scheme of Last Resort (CSLR) making payments to clients.
On 31 October 2024, the Australian Financial Complaints Authority (AFCA) made three determinations against Viridian Equity, which Viridian Equity failed to pay.
Subsequently, on 11 March 2025, the CSLR paid three payments totalling $450,000 for the AFCA determinations and notified ASIC. As a result, on 17 April 2025, ASIC cancelled Viridian Equity’s AFS licence.
“Where the CSLR pays compensation to an eligible consumer in relation to an AFCA determination and notifies ASIC of the details of the firm that failed to pay the compensation, ASIC must cancel the AFS licence or credit licence of the firm,” the regulator said.
“The cancellation is not subject to discretion or merits review.”
The AFCA determinations against Viridian Equity relate to investments in a property development managed investment scheme which subsequently failed and caused the complainants to lose between $150,000 and $400,000, depending on the case.
The complaints authority added that the project was restricted to wholesale clients or sophisticated investors.
“The financial firm incorrectly assessed the complainants as sophisticated investors. The complainants were ineligible to invest in the project. The financial firm should not have accepted their investment application,” AFCA wrote in one of the determinations.
Following the AFCA complaint process, ASIC noted that “all reasonable steps to obtain compensation from the financial firm must be taken before a CSLR payment can be made”.
However, this is not the first time that an unpaid AFCA determination and subsequent CSLR payment have led to an AFSL being cancelled, with the corporate regulator taking the action against Libertas in August 2024.
Libertas, which was acquired by Sequoia Financial Group in August 2019, went into liquidation in May 2023. In a statement at the time, Sequoia said it planned to consolidate AFS licences, with management making the decision to transfer Libertas’ operations and customers to InterPrac Financial Planning and Sequoia Wealth Management.
The former dealer group is now managed by an external company.
An AFCA determination had previously been made against Libertas on 24 July 2023, but this was not paid by the firm. As a result, the CSLR paid an unspecific amount of compensation to the person on 24 July 2024 and notified ASIC, which prompted the cancellation.
In October, ASIC also cancelled the AFSL and Australian Credit Licence of Ultiqa Lifestyle Promotions Limited on the back of a CSLR payment, while it also cancelled the AFSL of both DOD Bookkeeping and RPD Group Advice in November.
