The Australian Securities and Investments Commission (ASIC) has stepped up enforcement against wrongdoing involved with the management of Australian Financial Services Licences (AFSL), banning at least six individuals between January 2016 and September 2016 from the provision of financial services. The multiple bans follow a concerted campaign by ASIC to crackdown on the conduct and compliance of AFSL holders.
Ms King: $1.3million of financial deception – permanently banned and heads to prison
On 12 August 2016, ASIC permanently banned Ms Kerrie Marie King from providing any financial services or engaging in any credit activities, citing that the ban “was in the public interest”. Earlier in the year, Ms King was convicted in the County Court of Victoria on five counts of obtaining property by deception, two counts of obtaining financial advantage by deception, and other unrelated charges. The total value of her deception was more than $1.3 million. Along with her permanent ban from financial services and credit activities, Ms King was sentenced to five years imprisonment with a non-parole period of three years.
The Sharemarket College: AFSL cancelled and Responsible Managers banned due to deception and more
On 30 August 2016, ASIC cancelled the AFSL of The Sharemarket College Pty Ltd for a failure to comply with its AFSL obligations, including:
- Making misleading or deceptive statements in relation to a financial product or a financial service;
- providing personal advice to clients when they were only licensed to provide general advice;
- failing to notifying ASIC of significant breaches within 10 days; and
- failing to maintain the competence to provide financial services authorised under its AFSL.
The nominated responsible managers of The Sharemarket College, Mr Graeme Allan Rogers (Mr Rogers) and Mrs Jill Rogers, were also banned from providing financial services for four and three years respectively.
Ms Farias: 3 charges of loan fraud – permanently banned
On 12 September 2016, ASIC permanently banned Ms Jennifer Farias from engaging in credit activities and providing financial services. Ms Farias’ ban follows an ASIC investigation into her conduct and criminal action taken against her in the NSW Local Court. Ms Farias was a finance broker based in Sydney who pleaded guilty to three charges of loan fraud.
Mr Panganiban: Repeated misconduct with 49 clients – permanently banned
On 14 September 2016, ASIC permanently banned Mr Rommel Panganiban from providing financial services. Mr Panganiban had been the subject of ASIC surveillance for several months, and was found to have:
- failed to act in his clients’ best interests
- failed to have a reasonable basis for advice, and
- prioritised his own interests over that of his clients.
Mr Panganiban was an authorised representative of AMP Financial Planning Pty Ltd (AMP) between 19 March 2010 and 12 September 2014. During this time, Mr Panganiban advised 49 clients to cease their existing AMP insurance policies and replace them with new AMP insurance policies, without considering whether such an action was in the best interests of each client and without advising clients that he was able to transfer the policies without the need to cease and replace. By ceasing and replacing the insurance policies rather than transferring them, the full rate of commission for each policy was payable to AMP, and thereby increased Mr Panganiban’s own remuneration to the financial detriment of his clients. ASIC found that the repetitive nature of Mr Panganiban’s conduct illustrated that he was not of good fame and character.
Mr Hill: Fraudulent use of investor funds – permanently banned and heads to prison
On 15 September 2016, ASIC permanently banned Mr Steven William Hill from providing financial services and engaging in credit activities. An ASIC investigation found that Mr Hill had fraudulently misappropriated investor funds between January 2006 and February 2007. Earlier in the year, Mr Hill was convicted on six counts of fraudulent misappropriation and sentenced to 2 years and 9 months imprisonment.
The action taken by ASIC to ban six individuals from providing financial services is a reminder of how seriously ASIC treats conduct and compliance associated with the provision of financial services. ASIC has stated that it will continue to take action against AFSL holders and its management representatives who fail to meet their ongoing obligations or who act dishonestly, stating that “ASIC will ban people from the finance industry who act dishonestly and place personal interests ahead of those they service.”
If you would like more information about compliance with ongoing AFSL obligations that may apply to you, please contact us.
Sarah works with the Compliance Team with a particular focus on compliance and legal services. Sarah works with the Legal Team providing ongoing assistance in drafting and reviewing documentation as well as legal research. Sarah assists clients with AFSL and ACL applications, variations and also assists in the implementation of compliance reviews. She provides ongoing compliance support in the form of compliance program implementation and reviews.