Adviser’s permanent ban after exam falsification varied by AAT

A financial adviser who was permanently banned for falsifying his financial advice exam result has seen the banning amended following a successful appeal to the Administrative Appeals Tribunal (AAT).

Todd Karamian was permanently banned in March from providing financial services and carrying on a financial services business.

X

Continue to Website

According to ASIC, the AAT has varied the regulator’s decision, reducing it to seven years.

ASIC had permanently banned Karamian after finding he altered his Financial Adviser Certificate from a fail to a pass result and sent the altered certificate to his licensee, Bluepoint Consulting Pty Ltd, which was then subsequently provided to ASIC.

Karamian was an authorised representative of Bluepoint Consulting Pty Ltd from 2 August 2004 to 9 March 2023. He was also a director of Bluepoint Consulting Pty Ltd from 1 July 2005 to 15 March 2023.

The regulator said it found that he provided personal advice to 11 retail clients when he was not authorised to do so as he had failed the financial adviser exam.

The AAT’s Justice Kyrou noted: “In order to uphold the integrity of the industry and those objectives, it is essential that the period of the banning order, which is made in relation to the applicant, is sufficiently lengthy to convey to others who are in the industry – or aspire to join it – that conduct of the type engaged in by him will result in a lengthy banning period, so as to deter them from engaging in such conduct.”

Factors discussed by Justice Kyrou regarding the banning period include “the low risk of the applicant engaging in conduct such as forgery of a document or misleading ASIC in the future; his acceptance of responsibility and remorse; the further study he has undertaken since March 2023; the fact that his conduct did not cause any financial loss to any of his clients; and the fact that, although he benefitted financially from his wrongdoing, his financial benefit was not at the expense of anyone else”.

At the time that it handed down the original ban, ASIC explained that it identified Karamian’s conduct through a “proactive review” of individuals who were listed as current financial advisers on the Financial Adviser Register (FAR) despite not having passed the financial adviser exam by 1 January 2022 or 1 October 2022 where the financial adviser qualified for the extension.

The regulator disclosed that as a result of this review, the relevant Australian financial services licensees (AFSLs) (or where necessary, ASIC) have corrected the authorisation status or cease dates of over 1,300 individuals.

AFSLs are responsible for updating the FAR within 30 business days following a change to a financial adviser’s information, including whether the financial adviser has passed or failed the financial advice exam.