TheAustralianSecurities and Investments Commission(ASIC) has begun the new year with a spate of actions against financial advisers and their businesses.
The crackdown has included the banning of one adviser for life, another for two years, a court order freezing the assets of two other advisers and a number of enforceable undertakings.
ASIC spokesperson Angela Friend says that although the wave of actions are a result of coincidence more than a targeted campaign, advisers should be aware that the regulator is always on the lookout for illegal practices.
ASIC permanently banned Sydney accountant Leslie Nelson from dealing in securities or giving investment advice, in relation to his conduct as the trustee of a number of unit trusts into which investors, mainly elderly retirees, placed close to $3.7 million.
An ASIC investigation found Nelson misled and deceived 120 investors into believing the funds would be invested in property mortgages, when in reality he used the money to prop up a failing agricultural business and to purchase land in Mudgee for an olive grove project.
Victorian adviser John Raywood, a former authorised representative of Barton Capital Securities (BCS), was also banned from acting as an investment adviser, although only for a period of two years.
ASIC found Raywood conducted unauthorised share trades to the value of $13,500 on the accounts of two clients with the intention of settling personal debts.
Interim orders were also recently obtained by ASIC in the Federal Court against former financial advisers David Mudge and Geraldine Haupt.
The court order prevents the two partners from dealing with or disposing of the proceeds of a forthcoming sale of a residential property until further notice.
The action began after ASIC investigated allegations that Mudge had withdrawn funds from a client’s managed investment account without consent and paid the money into bank accounts he personally controlled.
Also keeping ASIC busy were Allen and Ann Gillon, who have given enforceable undertakings that they will no longer provide financial product advice.
The pair’s company, A&A Gillon, based in Queensland, was operating a Web site called Sharepro, which ASIC deemed was providing financial advice while not holding an Australian Financial Services Licence (AFSL).
An enforceable undertaking has also been given by Victorian accounting firm Herman & Berry, as well as Hebe Computers and its directors Raymond Berry, John Wright and Ian Murray, in relation to several unregistered managed investment schemes.
The contributory mortgage schemes operated by both companies were not registered with ASIC as required by law.
Finally, a former director of Financial Options Group Incorporated (FOGI), Raymond Johnstone, also appeared in a Sydney court facing 18 counts of deception, linked to the closure in February last year of Australia Fund Limited of which FOGI was the major shareholder.
