ASIC commences proceedings against RI Advice
The Australian Securities and Investments Commission (ASIC) has announced it has commenced proceedings against RI Advice for alleged failure to have adequate cyber security systems.
The regulator said the action followed a number of alleged cyber breach incidents at certain authorised representatives (ARs) of RI, including an alleged cyber breach incident at Frontier Financial Group as trustee for The Frontier Trust (Frontier) from December 2017 to May 2018.
ASIC alleged that Frontier was subject to a “brute force” attack whereby a malicious user successfully gained remote access to Frontier’s server and spent more than 155 hours logged into the server, which contained sensitive client information including identification documents.
Following this, RI failed to have implemented (including by its ARs) adequate policies, systems and resources which were reasonably appropriate to manage risk in respect of cybersecurity and cyber resilience.
ASIC is seeking:
- Declarations that RI contravened provisions of the Corporations Act, specifically sections 912A(1)(a), (b), (c), (d) and (h) and (5A);
- Orders that RI pay a civil penalty in an appropriate amount to be determined by the Court; and
- Compliance orders that RI implements systems that are reasonably appropriate to adequately manage risk in respect of cybersecurity and cyber resilience and provide a report from a suitably qualified independent expert confirming that such systems have been implemented.
RI was, until 1 October 2018, a wholly owned subsidiary of Australia and New Zealand Banking Group Limited. On 1 October 2018, RI became a wholly owned subsidiary of IOOF Holdings Limited (IOOF).
“The allegations by ASIC are very general but appear to relate to a small number of cyber-attacks of a nature not uncommonly faced by Australian businesses, on a small number of authorised representatives of RI Advice, and in most instances, no client data would appear to have been compromised. Some of ASIC’s complaints relate back to events from 2016,” IOOF said in a statement made to the Australian Securities Exchange (ASX).
The firm also said that RI Advice worked for some time with its ARs and third party experts to improve its cybersecurity and resilience and has indicated to ASIC its willingness to work co-operatively in respect of these matters.
AUTHOR
Oksana Patron
Recommended for you
ASIC has shared data on its licensing activity during the 2023–24 financial year, including how many were cancelled or suspended.
Australia’s largest financial advice licensee has led adviser growth over the past week, while 15 new entrants joined the industry.
A research paper has detailed whether individuals are more or less likely to change their investment decision when the advice is generated by human or by artificial intelligence, including any gender differences.
Sydney-based financial advice firm Sherlock Wealth has announced it is now operating under its own AFSL, one week after Andrew Sherlock took over as its chief executive.
