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Tidying Up the Financial and Credit Services Industries

Posted on January 30th, 2017 by Sophie Gerber in ACL Compliance

ASIC Continues to Enforce Bans Against Inappropriate Activity Around the Financial and Credit Services Industry

Following on from our blog article published in November 2016, the Australian Securities and Investments Commission (ASIC) continues its enforcement actions against individuals involved in inappropriate activity around Australian Financial Services Licence (AFSL) and Australian Credit Licence (ACL) holders. Since 20 September 2016 and 30 November 2016, ASIC has banned a further 15 individuals from providing financial and/or credit services in Australia. This ongoing enforcement action continues ASIC’s scrutiny of the financial and credit services industries.

Mr O’Rourke is permanently banned from providing financial services.

Mr Damien O’Rourke was permanently banned by ASIC from providing financial services. Mr O’Rourke a former financial adviser for AMP Financial Planning Pty Ltd (AMP) was found to have:

  • provided clients with inappropriate advice by not making reasonable inquiries
  • failed to provide 31 clients with the required disclosure documentation; and
  • borrowed over $2m from clients, approximately 90% of which has not been repaid.

This banning reiterates ASIC’s stance on financial advisers’ conduct being in the best interest of the client.

Mr Madhoji is permanently banned from providing financial services or engaging in any credit activity and sent to prison.

Mr Sandeep Madhoji, an Authorised Representative, was permanently banned by ASIC from providing financial services or engaging in any credit activities. Mr Madhoji’s banning follows on from a joint investigation between ASIC and the Queensland Police where Mr Madhoji was sent to prison for seven and a half years on charges of fraud. Mr Madhoji was found to have used some client funds to cover the loss of other client portfolios. It is estimated that 14 clients collectively lost a total of over $3m. In order to cover the client losses, Mr Madhoji continually made false statements to his AFSL holder regarding the client losses as well as falsifying client statement relating to the relevant transactions.

Mr Mahoney is banned for 4 years from providing financial services.

Mr Michael Mahoney was banned from providing financial services by ASIC for a period of 4 years. ASIC found that Mr Mahoney engaged in misleading and deceptive conduct when providing financial services during his employment at BT Financial Group Pty Ltd. Mr Mahoney entered false information regarding various client’s health or health risk factors when assisting them with applications for insurance policies ultimately increasing their risk without providing the client with an opportunity to assess the risk.

Mr Donaldson is permanently banned from providing financial services.

Mr Andrew Donaldson was permanently banned from providing financial services after it was found that he entered a significant number of false entries to offset trading losses and boost trading profits. Mr Donaldson was an FX options and futures trader for Deutsche Bank.

Mr Williams is permanently banned from providing financial services.

Mr Troy Andrew Rodney Williams was permanently banned from providing financial services after ASIC found that Mr Williams provided false statements to clients in the provision of disclosure documentation to clients regarding his qualifications. Mr Williams claimed he was more qualified than what he actually was and had completed courses in financial products which he never actually obtained. On top of this, Mr Williams doctored false qualification certificates.

Mr Meehan is permanently banned from engaging in credit activities.

Mr Bernard Meehan was permanently banned from providing credit services to clients after submitting false documentation on behalf of clients. It was found that Mr Meehan submitted false payslips (some of which had never even been issued by the employer), document checklists and loan severability forms relating to 9 clients in an attempt to assist them in obtaining home loans.

Ms Whelan is permanently banned from providing financial services or engaging in any credit activity and sent to prison.

Ms Linda Rae Whelan was permanently banned from providing financial services or engaging in any credit activity. Ms Whelan has also been sentenced to two and a half years’ imprisonment on fraud and stealing charges following a joint investigation between ASIC and the Queensland Police. Ms Whelan used her position as Treasurer for AFSL entity, National Adviser Services Pty Ltd (NSA), to draw cheques from NSA’s account which were cashed for her personal benefit. Ms Whelan was also ordered to pay over $33,000 in compensation.

Mr Howard is permanently banned from providing financial services.

Mr Ashley Howard was permanently banned from providing financial services after ASIC found:

  • used more than $1.8 million of client funds for his own benefit or the benefit of others;
  • provided false information and documents to clients and third parties;
  • assist his trustee in bankruptcy by not lodging a statement of affairs;
  • assist the liquidator of Meridien Capital Ltd, a company of which he was a director, by not providing a report as to the company’s affairs, not providing information as reasonably required and directed by the liquidator and did not produce the books and records of the company; and
  • comply with Notices served by ASIC to produce documents and attend an examination.

ASIC found that overall Mr Howard was not of good fame and character and engaged in dishonest conduct, failed to inform clients that he was not authorised to trade, provided unlicensed financial services and engaged in misleading conduct.

Mr Young is banned for 5 years from providing financial services.

Mr Christopher Young was banned from providing financial services for a period of 5 years. ASIC found that Mr Young failed to act in the best interest of his clients after a two-year surveillance period of Mr Young’s client files.

Mr Karakatsanis is permanently banned from providing financial services.

Mr George Karakatsanis has been permanently banned by ASIC from providing financial services. Mr Karakatsanis was found to have engaged in misleading and deceptive conduct when making investment recommendations to clients as well as failing to comply with financial services laws generally. As a result of Mr Karakatsanis’ actions client funds were incorrectly used with some clients losing the entirety of their initial investment.

Mr Amaranti is permanently banned from providing financial services.

Mr Sergio Amaranti, a former insurance broker, has been permanently banned from providing financial services. ASIC found that Mr Amaranti directed refunds owing from insurance brokers to clients to accounts held personally by Mr Amaranti.

Mr Beckton is banned for 5 years from providing financial services.

Mr Stephen Michael Beckton has been banned by ASIC from providing financial services for a period of 5 years. Mr Beckton provided advice to clients switch superannuation and insurance accounts where there was little benefit and significant cost to the client. Ultimately, Mr Beckton received increased adviser fees and commissions from insurers. This banning reiterates ASIC’s stance on financial adviser’s conduct being in the best interest duty of the client.

Mr McCarthy is banned for 8 years from providing financial services.

Mr James Edward McCarthy has been banned for a period of 8 years from the provision of financial services in Australia. Mr McCarthy’s entity was an Authorised Representative of AMP and was found to have falsified disclosure documents and forged client signatures in order to comply with an internal audit conduct by AMP.

Mr Bishop is banned for 8 years from providing financial services.

Mr Anthony Bishop has been banned for a period of 8 years from providing financial services after providing inappropriate advice to clients and failing to provide 1 client with required disclosure documentation. Mr Bishop failed to tailor personal advice to the needs of the client. 29 former clients of Mr Bishop were awarded over $1.1m in compensation.

Mr Griggs is permanently banned from providing financial services.

Mr Christopher John Griggs has been permanently banned from providing financial services after ASIC found that Mr Griggs prepared and submitted applications for insurance premiums without the authority or knowledge of the client and forged the signature of the applicants. Loan funds that were approved were paid into a bank account controlled by Mr Griggs and applied to his benefit. Mr Griggs obtained a benefit of over $150,000.

Sarah Murray

Sarah works with the Compliance Team with a particular focus on compliance and legal services. Sarah also 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.