Professional Negligence

ASIC bans Queensland financial adviser

ASIC bans Queensland financial adviser

The Australian Securities and Investments Commission on Thursday said that Ian Victor Haisman of Beenleigh had been providing templated advice not tailored to his clients' individual circumstances, needs and financial goals.

Gold Coast director and property developer sentenced to eight years’ imprisonment

Gold Coast director and property developer sentenced to eight years’ imprisonment

“Owing investors approximately $9 million (17-246MR). Many of the investors were pensioners and were approached by telemarketing or word of mouth. Investors were convinced to borrow against their homes and were told that their money would be used to develop property in Tasmania. Instead, the money paid by investors was used to pay back interest owed to other investors, payments to employees, cash withdrawals and transfers to personal bank accounts.”

Financial advice firm to pay $1 million penalty for breach of best interests duty

Financial advice firm to pay $1 million penalty for breach of best interests duty

The Federal Court has imposed a civil penalty of $1 million against Melbourne-based financial advice firm NSG Services Pty Ltd (currently named Golden Financial Group Pty Ltd) (NSG) for breaches of the best interests duty introduced under the Future of Financial Advice (FOFA) reforms.

John Dimitropoulos permanently banned by ASIC from financial services and credit in connection with property and SMSF spruiking

John Dimitropoulos permanently banned by ASIC from financial services and credit in connection with property and SMSF spruiking

Mr Dimitropoulos' banning arises from ASIC's ongoing investigation into a property and self-managed superannuation fund (SMSF) promoting group, which includes the companies formerly called Heritage Financial Solutions Australia Pty Ltd (in liq) (Heritage Financial Solutions) and Sunpac Finance Pty Ltd (Sunpac Finance).

ASIC permanently bans Gold Coast financial adviser Mr Satvir Singh Birk

ASIC permanently bans Gold Coast financial adviser Mr Satvir Singh Birk

ASIC has permanently banned Gold Coast based financial adviser Mr Satvir Singh Birk from providing financial services.

ASIC Warns Consumers About Investment Scams

ASIC Warns Consumers About Investment Scams

ASIC Deputy Chairman Peter Kell said, 'The Targeting Scams report published today by the Australian Competition and Consumer Commission (ACCC) shows reports to Scamwatch on investment scams increased in 2016. ASIC is alerting the public to ways to stay informed and protect themselves from scams.

16-444MR ASIC permanently bans former financial planner Stewart Banks

ASIC has permanently banned Queensland financial adviser Mr Stewart James Banks, from the Gold Coast, from providing financial services and engaging in credit activity.  

Mr Banks was employed as a representative of Professional Investment Services (PIS) from 18 April 2007 until 20 May 2015. 

ASIC found that during the period between September 2012 and April 2015, Mr Banks had acted dishonestly and engaged in misleading and deceptive conduct under the Corporations Act, in that he: 

  • Created documents, invoices, and fee forms in relation to six clients which were false because he did not undertake the hours of work claimed and was not entitled to the fees charged; 
  • Told two clients that he was paid by the insurance product provider when in fact he drew fees directly from clients' superannuation; 
  • Provided false declarations to the trustee of the superannuation fund in order to access fees from six clients' superannuation accounts totalling $286,530.60; and 
  • Gave funds to clients from their superannuation, and unknown to his clients, kept a portion of the funds for himself.  

ASIC also found that Mr Banks was not of good fame and character as his conduct was dishonest and involved the betrayal of client trust, as well as deceiving PIS and the trustee of the superannuation fund.  

ASIC Deputy Chair Peter Kell said, 'ASIC will take action to remove dishonest persons from the financial services and credit industry to protect the public.  

'Mr Banks' conduct was particularly harmful in that his actions eroded his clients' superannuation, which exists for the sole purpose of providing retirement benefits to members, or to their dependents if a member dies before retirement.' 

Mr Banks has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.

16-363MR ASIC disqualifies SMSF auditor

ASIC has disqualified Pierre Jarjoura of New South Wales from being an approved self-managed superannuation fund (SMSF) auditor. ASIC determined that Mr Jarjoura had breached independence and audit requirements and was not a fit and proper person to be an approved SMSF auditor. 

ASIC found that Mr Jarjoura had breached: 

  • Auditor independence requirements of APES 110 Code of Ethics for Professional Accountants, where he audited a fund of which he was a member and the trustee.  
  • Requirements of Australian auditing standards to adopt appropriate procedures for properly maintaining audit documentation. 

ASIC Commissioner John Price said, ‘SMSF auditors play a fundamental role in promoting confidence in the SMSF sector so it is crucial that they adhere to ethical and professional standards. ASIC will continue to take action where the conduct of SMSF auditors is inadequate.’ 

SMSF trustees and members can check whether their auditor is registered, or whether a person has been disqualified, by searching ASIC's SMSF auditor register at connectonline.asic.gov.au. 

Background 

Information about Mr Jarjoura was referred to ASIC by the Australian Taxation Office (ATO) under section 128P of the Superannuation Industry (Supervision) Act 1993 (the SIS Act). 

From 1 July 2013, the SIS Act required all auditors of SMSFs to be registered with ASIC. This was to ensure that all SMSF auditors meet the base standards of competency and expertise. 

ASIC and the ATO work closely together as co-regulators of SMSF auditors. The ATO monitors SMSF auditor conduct and may refer matters to ASIC for possible action such as disqualification or suspension of their registration. 

16-357MR Federal Court declares 21st Century land banking schemes to be unlawful and bans Jamie and Dennis McIntyre for 10 years

The Federal Court has declared that land banking developments operated by Jamie and Dennis McIntyre were unregistered managed investment schemes in a decision delivered by His Honour Justice Bromwich on 17 October 2016. 

The Court also made orders that Jamie and Dennis McIntyre be disqualified from managing corporations and restrained from carrying on financial services for a period of 10 years each, due to them being officers of companies that had failed, by virtue of them being wound up, and which had also repeatedly contravened the Corporations Act .

Jamie and Dennis McIntyre agreed to the banning orders made against them.

Further, the Court made orders to wind up the unregistered managed investment schemes, which were promoted and advertised by the 21stCentury land banking companies*.

The unregistered managed investment schemes are known as:

  • Botanica, located at 805 Archer Rd, Kialla, Victoria 3631
  • Secret Valley Estate, located at955, Old Sydney Road, Bylands, Victoria 3762
  • Oak Valley Lakes Estate & Resort, located at 124 Booth Road, Brookhill, Townsville, Qld 4816
  • Bendigo Vineyard Estate & Resort, located at51 Andrews Road, Bendigo, Victoria 3551
  • Melbourne Grove Estate, located at1491 Dohertys Road, Mount Cottrell, Victoria 3024

Simon Wallace-Smith and Robert Woods of Deloitte have been appointed as joint liquidators of the unregistered managed investment schemes.

ASIC Commissioner Greg Tanzer said, "The high banning periods ordered by the Court in this case are necessary to protect the public from those who are officers of companies that repeatedly contravene the Corporations Act.  It also serves as a warning to those involved in unlawful unregistered managed investment schemes, including those that involve land banking, that ASIC will take action."

ASIC's investigation into the matter is ongoing.

Background

ASIC commenced proceedings in August 2015 against Jamie and Dennis McIntyre and the 21st Century land banking companies in relation to their promotion and sale of interests to investors in five land banking schemes (Refer: 15-214MR).

ASIC’s proceedings are part of ASIC's wider and ongoing investigation into land banking schemes.

More information about ASIC's proceedings, including frequently asked questions

*Jamie McIntyre refers to his companies as the "21st Century Group". 21st Century Group Pty Ltd (ACN 108 150 545) is not a defendant to the proceeding, and ASIC is not aware of any connection between 21st Century Group Pty Ltd and the defendants.

16-326MR ASIC acts to freeze sale of land proceeds in excess of $100 million pending disclosure to investors

Following an application made by ASIC on 19 August 2016, the Federal Court of Australia has made orders limiting the ability of Aviation 3030 Pty Ltd (Aviation) to deal with the proceeds of sale of property it owns in Victoria.

The Aviation property was purchased in 2011 by Aviation, which raised funds for this purpose from around 70 shareholders and unitholders.

Aviation consented to the orders being made.

ASIC commenced its investigation into Aviation in May 2016. In the course of its investigation, ASIC became aware that: 

  • in March 2016, Aviation had issued shares to companies associated with a director and a former director of Aviation, purportedly pursuant to an Aviation letter dated 4 May 2011 and an option agreement dated 18 September 2012 entered into by the then directors of Aviation ('the 2016 share issue'); 
  • this resulted in a substantial dilution of the interests of investors, and an increase in the interests controlled by the directors of Aviation and their associates; 
  • neither the 4 May 2011 letter nor the 18 September 2012 option agreement had been disclosed to investors prior to their investments in Aviation and the 2016 share issue had also not been disclosed to all investors; and  
  • in May 2016, Aviation received an offer from a third party to purchase the Aviation property for more than $100 million and that this offer had not been disclosed to all investors. ASIC's understanding was that this property was expected to be sold within a short timeframe.

Based on these matters, ASIC was concerned that the proceeds of sale of the Aviation property would be distributed in accordance with the 2016 share issue. This was in circumstances where investors had not been provided with proper disclosure in relation to the dilution of their interests, either at the time of their investments or subsequently.   

ASIC obtained the orders to protect the interests of investors and specifically to enable them to be provided with:

  • information as to the 2016 share issue (and the documents purportedly relied upon by Aviation for that purpose);
  • details of the proposed sale of the Aviation property; and
  • an opportunity to decide whether to obtain independent advice concerning their investments. 

As part of an agreement reached with ASIC, Aviation undertook to provide disclosure to the Investors in relation to these matters, in a form agreed to by ASIC. Aviation has advised ASIC that it has completed this process.

Developments subsequent to the orders

Aviation has advised ASIC that the offer to purchase the Aviation property has been withdrawn.

The Orders will remain in place until further order of the Federal Court. The matter returns to the Federal Court on 25 November 2016.

ASIC's investigation into Aviation is ongoing.