ASIC penalises Berndale Capital Securities

The Australian Securities and Investments Commission (ASIC) has cancelled Melbourne-based OTC derivative issuer, Berndale Capital Securities’, Australian financial services (AFS) licence and its former director, Stavro D’Amore, has been banned from providing financial services for six years.

Following an administrative hearing, the regulator found that, among other things, Berndale:

  • Failed to take reasonable steps to ensure that its representative complied with financial services laws;
  • Failed to provide financial services efficiently, honestly and fairly;
  • Failed to comply with the client money reporting requirements;
  • Failed to lodge annual financial statements, and audit reports; and
  • Was likely to contravene its general obligations under an AFS licence.

The regulator also found D’Amore was involved in contraventions of financial services laws by Berndale, and was not adequately trained or competent enough to provide financial services.

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ASIC commissioner, Cathie Armour, said AFS licensees must ensure that they comply with their reporting competence and resourcing obligations.

“If an AFS licensee chooses to allow other entities to operate under its license, ASIC expects that the licensee will ensure that the representatives are not providing unlicensed financial services and are properly monitored,” she said.

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Hi Anastasia. As a client of Berndale I find it rather disappointing that whilst ASIC can rightfully close down an advisor if they are 'doing the wrong thing' and can freeze personal assets to protect creditors etc that they seem to have missed the boat! I am of the understanding that Berndale had set up 'client segregated accounts' meaning that each client account was separate both from each other and the company's trading account! As such these funds should still be both protected and available! Why can't ASIC confirm if this is in fact the case, else what do we (or they) believe they are protecting! I would have thought this would be the first area for ASIC to address for the peace of mind of clients whose funds are now well and truly 'up in the air'!! If I was ASIC I would have this as my number 1 priority!

I am also a client of Berndale. What does it mean ASIC regulated Broker. The answer is nothing at all. It appears that this company has been allowed to operate outside the regulations for most of 2018 and ASIC had full knowledge. What credibility has the FX broker industry got when a broker , with company directors with a long history of non compliance can even get an AFSL licence. This situation could affect up to 3000 clients and millions of dollars. This could be one of the biggest misappropriation of money from a financial institution in Victoria's history. Any person interested in further information should speak with Dan Oaks at the ABC who is putting a story together a story on these crooks.

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