Adviser given stay on ASIC ban
A Queensland financial adviser has been granted a stay on the implementation of a five-year ban from providing financial services following an Administrative Appeals Tribunal of Australia (AAT) hearing.
The Tribunal supported David Wilkins' application for a stay on the implementation of the ban imposed by the Australian Securities and Investments Commission (ASIC) on 3 September 2014, until after a review of the decision, on the grounds that it might cause harm to "Wilkins' economic interests".
"Even with the co-operation of the parties it is unlikely that this matter could come on for hearing until the New Year with the result that, absent a stay, Mr Wilkins would be prevented from pursuing his occupation for a period of six months," AAT deputy president, Philip E Hack SC said.
ASIC alleged that Wilkins, an authorised representative of Wilkins Financial Planning Pty Ltd, had engaged in misleading or deceptive conduct in explaining the risk of option trading to his clients.
The regulator said he had described a scheme for trading in options that he called the "Income Machine", as involving "a really low amount of risk", while ASIC believed it was a "high risk investment strategy with the potential for unlimited losses", allegedly in breach of misleading and deceptive conduct provisions of the Corporations Act (section 1041H).
ASIC also claimed that Wilkins had provided investment advice to five clients that was not appropriate, it also reported that he had been involved as a supervisor in the conduct of an employee, who had allegedly breached the appropriate advice and misleading and deceptive provisions of the Corporations Act.
However, Wilkins argued that ASIC's approach in relation to the alleged breaches of s1041H had focused upon isolated representations, rather than the totality of information provided to clients, and when the advice was considered in context it was not misleading or deceptive.
Wilkins also pointed to "many other instances where particular clients were well satisfied with the advice given," ATT deputy president Hack said.
"As it seems to me Mr Wilkins has demonstrated that he has at least an arguable case."
Under the conditions of the stay, Wilkins has been ordered to send a letter to all existing clients to inform them of the ATT's order, and to provide any clients who request a copy of ASIC's initial decision with it within seven days, at no cost.
The AAT also ruled that insofar as the applicant provides financial services to any new or existing clients, before giving any advice or making any recommendations the applicant must have the proposed advice and/or recommendations reviewed by a licensed financial adviser from one of eight prescribed firms to verify that the proposed advice and/or recommendations are appropriate for the client.
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