ASIC has commenced proceedings in the Federal Court of Australia against Westpac Banking Corporation in relation to alleged poor financial advice provided by one of its former financial planners, Mr Sudhir Sinha.
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.
The corporate regulator has launched a major investigation into hundreds of funds in a bid to uncover unlicensed SMSF advice.
As reported by ifa sister publication SMSF Adviser earlier this year, ASIC is currently conducting a major shadow shopping exercise, and has now started contacting various SMSF professionals to collate data on the set-up process of hundreds of funds, as part of a massive research project set for release later this year.
In emails seen by SMSF Adviser, it is clear ASIC has selected several hundred funds that were set up in September 2016 for random investigation, and is contacting tax agents associated with the funds.
ASIC is asking if the clients of the tax agents received any professional advice about establishing their SMSF and, if so, that the contact details are passed on.
While ASIC is gathering details about both financial advisers and accountants as part of this project, it is understood that broadly, unlicensed accountants in particular are on the regulatory radar.
The information supplied to ASIC is treated as anonymous, but the general findings will be published in a report slated for the second half of this year, an ASIC spokesperson told SMSF Adviser.
ASIC could not outline any further details of the investigation, except to confirm that it is pursuing its “major” shadow shop as announced in February, and will be looking at random samples of SMSF advice.
Despite being relatively lax in the past to instances of accountants operating outside of the accountants’ exemption in particular, BDO’s national leader for superannuation Shirley Schaefer suggested ASIC will be taking no prisoners this time around.
“I suspect a lot of accountants have sat outside the accountants’ exemption for years, and ASIC never did anything about it in the past,” Ms Schaefer told SMSF Adviser.
She acknowledged that many accountants do not agree that the SMSF services they are providing fall into the financial advice category, an argument that is largely irrelevant in 2017.
“This is not just tax advice. I certainly believe [SMSFs are] a structure not a product, but that argument is gone. There’s no point having that one again. We’ve been there and it’s gone,” Ms Schaefer said.
Article from: Independent Financial Advisor
KATARINA TAURIAN- Wednesday, 29 March 2017
ASIC has banned financial adviser, Mr Darren Tindall, of Orange, NSW, from providing financial services for five years after an investigation found he failed to comply with financial services laws.
Mr Tindall was an authorised representative of Roan Financial Group Pty Ltd between 9 May 2013 and 19 May 2014, and was based in Orange, NSW.
Mr Tindall was banned from providing financial services after ASIC found that he had:
- engaged in misleading and deceptive conduct on a client's behalf by failing to disclose their pre-existing medical conditions on an insurance application submitted to an insurer;
- engaged in dishonest conduct by not disclosing the medical conditions in transferring that insurance obtained to a new insurer; and
- recklessly made misleading comparisons about superannuation products to four clients, which induced those clients to switch their superannuation.
ASIC Deputy Chair Peter Kell said, 'ASIC will take action against financial advisers who have been dishonest or who mislead their clients, in order to increase public confidence in the financial services industry.'
On 17 January 2017, Mr Tindall applied to the Administrative Appeals Tribunal (AAT) for a stay of the banning and review of ASIC's decision. The stay application was heard on 27 January 2017. On 9 February 2017, the AAT refused the stay. The date for the hearing of review of ASIC's decision is yet to be set.
ASIC has banned Mr Andrew TambyRajah, a former employee of ANZ Financial Planning, from providing financial services for a period of five years.
Mr TambyRajah, of Sydney, New South Wales was a financial planner with ANZ Financial Planning at Hurstville between 19 January 2006 and 30 July 2014.
Mr TambyRajah was banned from providing financial services as ASIC found that he engaged in misleading and deceptive conduct by creating false documents and falsely amending documents contained on client files. The conduct included:
- writing clients' names and initials on documents in the places designated for their signatures and initials;
- changing the dates recorded on a number of documents; and
- creating false investor profile forms for two clients by photocopying forms they had signed in previous years and changing the dates on the copied documents.
Deputy Chairman, Peter Kell said, 'Financial advisers are important gatekeepers who must act honestly to increase broader public confidence in the financial services industry.
'This banning should serve as a deterrent to any financial adviser tempted to act dishonestly.'
Mr TambyRajah has the right to seek a review of ASIC’s decision to the Administrative Appeals Tribunal.
ASIC's work in the Wealth Management Project covers a number of areas including:
- Working with the largest financial advice firms to address the identification and remediation of non-compliant advice; and
- Seeking regulatory outcomes, when appropriate, against licensees and advisers.
As part of its Wealth Management Project, ASIC has banned the following advisers from the financial services industry, in addition to Mr TambyRajah:
- Anthony Bishop (16-409MR)
- James Edward McCarthy (16-398MR)
- Troy Andrew Rodney Williams (16-342MR)
- Michael Mahoney (16-323MR)
- Damian O'Rourke (16-318MR)
- Rommel Panganiban (16-309MR)
- Anthony Jason Sourris (16-270MR)
- Sarah Kate Gardner (16-269MR)
- Nicholas Kerr (16-260MR)
- Craig Scott Miller (16-239MR)
- Wayne Meadth (16-188MR)
- Hardik Bhimani (16-124MR)
- Gerard McCormack (16-059MR)
- Shane Thompson (16-022MR)
- Ben Rickman (16-006MR)
- Ben Cheung (16-004MR)
- Mark Tidbury (15-383MR)
- Amanda Ritchie (15-294MR)
- Stuart Murray Jamieson (15-288MR)
- Sharnie Kent (15-286MR)
- Alfie Chong (15-259MR)
- Martin Hodgetts (15-218MR)
- Shawn Hickman (15-213MR)
- Brett O'Malley (15-121MR)
- Brian Farber (15-178MR), and
- Rebecca Locksley (15-070MR).
ASIC has banned life insurance financial adviser Mr Mateen Mohammed, of Calamvale, Queensland, from providing financial services for seven years.
ASIC’s action against Mr Mohammed, a former authorised representative of Synchronised Business Services Pty Ltd, is part of ongoing enforcement and regulatory action following ASIC’s review of life insurance advice.
As a result of ASIC's surveillance, it was found that Mr Mohammed:
- had not maintained the high standards expected of a provider of financial services;
- did not understand the duties and obligations imposed on a provider of financial services; and
- could not be relied upon to discharge the duties and obligations imposed on a provider of financial services.
In particular, it was found that Mr Mohammed did not act in the best interests of his clients in that he failed to:
- make reasonable enquires into clients' relevant objectives, financial situation and needs;
- conduct a reasonable investigation into financial products that might achieve the objectives of the clients, including their existing superannuation and insurance products; and
- prioritise the interests of his clients over his own.
ASIC also found that he had submitted an insurance application without his client's knowledge and as a result had misled or deceived the insurer as to his authority to do so.
ASIC Deputy Chairman Peter Kell said, 'Any advice to switch existing life insurance and superannuation products must be in the client's best interest. Where there is nothing in the client’s relevant circumstances to indicate that the switch would be beneficial, ASIC will conclude that the client is not in a better position.'
Mr Mohammed was an authorised representative of Synchronised Business Services Pty Ltd during the relevant period, from 1 July 2010 to 22 April 2015.
Mr Mohammed has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.
Outcomes following ASIC’s review of life insurance advice include:
- in May 2016, ASIC accepted an enforceable undertaking from Michael Melamed, a former authorised representative of Synchronised Business Service Pty Ltd (refer:16-147MR)
- in February 2016, ASIC permanently banned life insurance financial adviser Andrew Moroney (refer: 16-036MR)
- in January 2016, ASIC accepted an enforceable undertaking from Clearview Financial Advice Pty Ltd representative, Jason Churchill (refer:16-008MR);
- in September 2015, ASIC banned life insurance financial adviser and former authorised representative Lukas Zelka of Neo Financial Solutions Pty Ltd from providing financial services for three years (refer: 15-269MR);
- in July 2015, ASIC banned life insurance financial adviser Brian Farber from providing financial services for four years (refer: 15-178MR);
- in January 2015, ASIC imposed conditions on the Australian financial services (AFS) licence of Suncorp-owned Guardian Advice (refer: 15-003MR).
Former financial adviser, Mr Darren John Wise, has been sentenced in the Maroochydore District Court to seven years imprisonment on charges brought by ASIC. Mr Wise will be eligible for parole after serving 20 months.
Mr Wise, formerly of Rhodes NSW, had earlier pleaded guilty to one count each of forgery, using forged documents and fraud.
The charges related to Mr Wise's conduct between 23 October 1997 and 10 March 2006, when, as a financial adviser at Kawana Waters in Queensland, he:
- created six applications for margin loans on which he forged eight of his clients' signatures, the effect of which was to represent that the clients had agreed to act as guarantors for the margin loans;
- used the false margin lending applications with the intention of fraudulently inducing the lender to provide him margin loans; and
- on 67 separate occasions gained a benefit for himself by fraudulently lodging securities owned by clients as collateral for the margin loans without the clients' authorisation.
Mr Wise dishonestly obtained a total of $1,070,700 under the margin loans as a result of his misapplication of client assets. Mr Wise used the money for his own purposes including trading in securities on the ASX for himself, paying for losses in other trading accounts he held, and paying off personal debts.
ASIC Commissioner Greg Tanzer said, 'Mr Wise repeatedly engaged in dishonest conduct, putting his own interests ahead of his clients. This type of conduct undermines trust and confidence in the financial advice industry and will not be tolerated by ASIC or the broader community. We will act to ensure financial advisers who act dishonestly are held to account for their actions'.
Mr Wise was sentenced on 14 November 2016.
The Commonwealth Director of Public Prosecutions prosecuted the matter.
In February 2016, ASIC permanently banned Mr Wise from providing financial services (refer: 16-032MR).