Adviser banning overturned by AAT upheld by Federal Court
The Australian Securities and Investments Commission (ASIC) has claimed vindication of its decision to appeal an Administrative Appeals Tribunal (AAT) decision overturning a financial adviser banning order to the Federal Court.
It said that the Federal Court had set aside the AAT decision not to ban former RI Advice adviser, Robert Hutchison from providing any financial services.
It said the Federal Court found that the AAT had interpreted the scope of sections 1041G and 1041H of the Corporations Act too narrowly. Those sections prohibit dishonest, misleading and deceptive conduct “in relation to a financial product or financial service”.
The AAT ruled that Hutchison breached his contractual obligations with his licensee, RI Advice Group Pty Ltd (RI Advice), by not passing on the money he received directly from his clients to RI Advice. However, the Tribunal found that sections 1041G and 1041H did not apply to this conduct because it related only to the agreement between Mr Hutchison and RI Advice, not the financial service Mr Hutchison provided to clients.
ASIC noted that the Federal Court had disagreed, confirming the broad scope of the prohibitions.
“The Court confirmed that an indirect connection between a person’s dishonest or misleading conduct and a financial product or service is sufficient for the prohibitions to apply,” it said
It said the matter has been remitted back to the AAT to have the matter re-determined.
Hutchison, of Lower Chittering, Western Australia, a former financial adviser and authorised representative of RI Advice, was permanently banned by ASIC from providing financial services on 11 June 2017
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