Macquarie Investment Management and BT Funds Management (BTFM) have fallen foul of the Australian Securities and Investments Commission (ASIC) and have been required to take remedial action pay clients or fines accordingly.
However in a busy week for the corporate regulator it also lost a case against Mariner Corporation and its directors relating to a take-over offer made by Mariner in 2012.
ASIC stated that Macquarie Investment Management will provide $5.5 million in refunds to 2300 clients as a result of errors made through its Macquarie Wrap platform over 13 years from 2001 to 2014.
Macquarie reported the errors to ASIC which included failing to apply sufficient tax credits to the GST portion of client fees and charging administration fees which exceeded the maximum disclosed in the product offering documents.
After reporting the errors Macquarie had appointed Deloitte to assess the controls and processes around the remediation and compensation arrangements and had since found a third error relating to an administration fee listed in an offering document with all three errors having been rectified.
BT Funds Management has also been required to pay more than $20,000 in penalties after it was issued with two infringement notices relating to misleading statements in online advertising for BT Super.
The two fines, each worth $10,200 and relating to two separate online advertising campaigns, were issued by ASIC and related to comparisons made by BT regarding its fund and that of industry super funds.
ASIC said infringement notices resulted from online search results that produced the statement that “BT Super Has Outperformed Industry Super Funds Over the Last 5 Years” and the use of the words “Industry Super Australia” in the headlines of BT advertisements.
ASIC said “the representation was false or misleading because BT’s superannuation products had not generated greater returns during the stated period” and consumers could be misled into believing that BT had an affiliation with Industry Super Australia (ISA), which has never been the case.
ASIC was less successful in legal action against current and former directors of Mariner Corporation relating to the latter’s proposed takeover bid for Austock Group Limited
The regulator lost its case in the Federal Court of Australia which ordered that ASIC’s originating application be dismissed and in doing so found Mariner had not breached the law and its directors had not breached their duties when making the proposed takeover bid Austock in June 2012.
ASIC had sought financial penalties and disqualification orders against Mariner, its then chief executive and managing director, Darren Olney-Fraser, then director, Donald Christie, and former director, Matthew Fletcher. (Olney-Fraser and Christie resigned their positions in August 2014.)
ASIC had alleged that Mariner was reckless in making the bid as it did not have the financial resources to fund the bid or backing from other parties at the time of the bid which was misleading since it was at a price less than Mariner was permitted to offer.
