ASIC’s January activity hints at increased enforcement action
ASIC kicked off the year with its first licence cancellation and a contempt of court application as it states it is seeking to send a “clear compliance and deterrence message” to its regulated entities.
Announcing its enforcement priorities, deputy chair Sarah Court said ASIC would be taking more matters to court this year and pursuing higher penalties.
“We are taking matters to court and pursuing higher penalties than ever before. In delivering against our priorities this year, we took action against some of Australia’s biggest corporations. And we are not deterred from taking challenging cases where legal outcomes are not guaranteed.”
Looking ahead, February will see the deadline for two new initiatives for licensees; by 16 February, licensees will need to have registered all their advisers on a new register, and by 29 February they will have to report all their internal dispute resolution (IDR) data to ASIC for the second half of 2023.
January activities
Queensland company penalised for false AUM representation
A Queensland company falsely representing that it managed $6.9 billion for investors and was affiliated with the Financial Services Council (FSC) was penalised for making false and misleading statements.
These included that it had $350 million in assets under management (AUM) and managed $6.9 billion on behalf of retail, wholesale and institutional investors when ASIC found it managed zero assets and had zero AUM.
Penta Capital Pty agreed to pay $53,280 to comply with four infringement notices by ASIC – payment is not an admission of guilt.
Sydney advice firm sees ASIC’s first 2024 licence cancellation
Indie Advice, based in Sydney’s Newtown, saw its Australian financial services licence cancelled on 19 January 2024 after the regulator became aware that the firm had “not been providing financial services for some time” despite being authorised to provide financial advice to retail and wholesale clients.
The licence will continue to be in effect until 30 June 2024 in order for Indie to keep its internal and external dispute resolution schemes operating.
Former Melbourne director faces prison for allegedly breaching 10-year ban
ASIC filed a contempt of court application in the Federal Court against Joshua David Fuoco for allegedly carrying on five financial services businesses despite being banned for 10 years.
In February 2018, he was ordered by the Federal Court not to carry on, or be involved in, a financial services business for 10 years after ruling three companies he ran had a business model that engaged in unconscionable conduct.
However, ASIC now alleges that he was involved in five companies between March 2019 and April 2023 in contravention of those orders. If found liable of contempt of court, there could be penalties of fine, asset sequestration or imprisonment.
AUTHOR
Laura Dew
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
