The Australian Securities and Investments Commissions (ASIC) has announced it has entered a conditional agreement with Dixon Advisory which will see the advisory pay a $7.2 million penalty for breaches of the Corporations Act as well as $1 million to pay ASIC’s costs of its investigation and legal proceedings.
The heads of agreement followed court-ordered mediation to resolve civil penalty proceedings commenced by ASIC against Dixon Advisory in the Federal Court in September 2020.
ASIC said its proceedings related to best interests duties under the Corporations Act, including allegations that Dixon Advisory representatives failed to act in their clients’ best interests to provide financial advice appropriate to the clients’ circumstances.
The in-principle resolution between the two parties would be subject to approval from the court.
In the announcement made to the Australian Securities Exchange (ASX), E&P Financial Group Limited, which wholly owns Dixon Advisory and Superannuation Services (DASS), said that under the heads of agreement:
- DASS agrees to pay to the Commonwealth a pecuniary penalty of $7.2 million which may be paid in two equal instalments on 31 December 2021 and 31 March 2022 if the court makes final orders in the legal proceedings before 1 November 2021
- DASS agrees to pay ASIC’s legal costs of its investigation and the legal proceedings agreed at $1 million, which may also be paid in two equal instalments on 31 December 2021 and 31 March 2022
- The parties consent to the making of declarations by the court to the effect that DASS contravened section 961k(2) of the Corporations Act in the period 6October 2015 to 31 May 2019 on a total of 53 occasions in relation to personal advice provided by its representatives in contravention of:
- ASIC agrees to seek no further declarations of contravention in the proceedings,
- The parties consent to the making of orders by the court pursuant to section 1101B(1) of the Corporations Act requiring DASS, within such time and in such manner as the court thinks fit
