ASIC has permanently banned Perth insurance broker, Mr Antonino Gucciardi, from the financial services industry for misleading, deceptive and dishonest conduct.
"Asic has permanently banned Andrew Peter Panayiotides from providing financial services."
ASIC has permanently banned Andrew Peter Panayiotides from providing financial services.
ASIC found that Mr Panayiotides failed to act in the best interests of clients and provided advice to clients of Morgan Stanley Wealth Management in relation to exchange traded options (ETOs) that was inappropriate when considering the financial circumstances and objectives of the clients involved.
Mr Panayiotides' conduct resulted in each of the client's superannuation accounts being significantly exposed to short cash covered ETO positions that were contrary to the risk profile declarations provided by the clients.
ASIC also found that Mr Panayiotides knew, or ought reasonably to have known, that there was a conflict of interest between the financial benefit Mr Panayiotides received, in the form of brokerage, from the numerous ETO transactions he advised clients to enter into and his clients' best interests, and that he failed to give priority to his clients' interests.
ASIC further found that Mr Panayiotides:
- improperly made payments into clients' bank accounts using his own funds;
- issued a false invoice;
- provided unethical advice to a client in relation to a superannuation fund withdrawal; and
- entered into a personal loan arrangement with a client in return for offering reduced brokerage while at another firm.
In considering Mr Panayiotides' conduct, which was not of an isolated nature, was not inadvertent and occurred over a long period of time in which clients incurred significant losses, ASIC had reason to believe that Mr Panayiotides was likely to contravene a financial services law in the future and was not of good fame or character.
ASIC Commissioner Cathie Armour said, 'Financial advisers are expected to act in the best interests of clients. ASIC will ensure appropriate enforcement action is taken against advisers who fail in this duty.'
Mr Panayiotides has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.
ETOs are a type of derivative that are considered high risk investments. A call option is the option to buy the underlying shares whereas a put option is the option to sell the underlying shares. Selling options to open a position is a high risk strategy in which the potential for losses is unlimited in the case of a sold call.
Mr Panayiotides was employed by Morgan Stanley Wealth Management between January 2013 and May 2015.
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).
Following an ASIC investigation, Mr George John Nowak has appeared in the Adelaide Magistrates Court charged with thirty one counts of deception and one count of dishonest dealings with documents.
ASIC investigated Mr Nowak's conduct in dealing with members of self-managed superannuation funds (SMSFs) who were undertaking property purchases offered by companies of which he was a director, including EJ Property Developments Pty Ltd. It is alleged that Mr Nowak misappropriated $1.8 million in SMSF monies by not holding funds in a designated account and by not applying those funds towards the intended property purchase.
Mr Nowak was not required to enter a plea and was granted conditional bail. The matter is listed for return at the Adelaide Magistrates Court on 12 July 2016.
The Commonwealth Director of Public Prosecutions is prosecuting these matters.
The charges of deception contrary to section 139(b) of the SA Criminal Law Consolidation Act 1935 each carry a maximum penalty of ten years imprisonment.
The charge of dishonest dealings with documents contrary to section 140 of the SA Criminal Law Consolidation Act 1935 carries a maximum penalty of ten years imprisonment.
In 2012 in response to the growth in SMSFs, ASIC established the SMSF Taskforce. The Taskforce continues to meet regularly to examine high-risk and emerging SMSF issues such as property spruiking to SMSFs, unlicensed conduct and false and misleading advertising of SMSFs.
Outcomes and actions stemming from the SMSF Taskforce include:
- ASIC accepted an enforceable undertaking (EU) from CMH Financial Group Pty Ltd and the sole director, Daniel White, after an ASIC surveillance found CMH had failed to provide advice about self-managed superannuation funds that was appropriate and in the best interests of clients (refer 16-097MR);
- Ms Sarah Jane Busteed was charged with three counts of dishonestly obtaining a financial advantage by deception and one count of dealing with over $100,000 that was the proceeds of crime (refer: 16-040MR);
- Superannuation Warehouse Australia Pty Ltd was ordered to pay a penalty of $25,000 for false and misleading“Free SMSF Setup” advertising (refer: 15-332MR).
- The Supreme Court of NSW found Park Trent Properties Group Pty Ltd had been unlawfully carrying on a financial services business for over 5 years by providing advice to clients to purchase investment properties through a SMSF (refer: 15-300MR).
- Dixon Advisory Group Limited complied with two ASIC infringement notices, paying two $10,200 penalties after including potentially misleading claims on its website (refer: 15-207MR).
- The credit licence of Queensland-based Smithson & Baye was cancelled following an investigation into a property and SMSF promoting group (refer: 15-228MR)
- ASIC released two information sheets to improve the quality of advice provided by advisers onSMSFs: Information Sheet 205 Advice on self-managed superannuation funds: Disclosure of risks(INFO 205) and Information Sheet 206 Advice on self-managed superannuation funds: Disclosure of costs (INFO 206) (refer 15-192MR).
- Omniwealth Services paid a $10,200 penalty for potentially misleading claims on its website (refer: 15-190MR).
- The principal of Sherwin Financial Planners, Bradley Thomas Sherwin, was charged with fraud. The charges relate to the use of SMSFs of former clients of Sherwin Financial Planners (refer: 15-158MR).
- The Federal Court of Australia ruled that Craig Gore and several other parties and financial services businesses, including Queensland-based ActiveSuper and Royale Capital, contravened sections of the Corporations Act or were knowingly concerned in those contraventions. (refer: 15-134MR)
- Australian Financial Planning Solutions Pty Ltd paid $10,200 in penalties for potentially misleading SMSF ads (refer: 15-052MR).
- ASIC banned the founder of the Charterhill Group of Companies, George Nowak, from providing financial services until 3 July 2017 on the basis that Mr Nowak is an undischarged bankrupt (refer: 15-048MR).
- Interprac Financial Planning agreed to address ASIC concerns relating to advice provided to some clients about SMSFs (refer: 14-258MR).
- Sentry Financial Services agreed to address ASIC concerns about SMSF advice provided to clients (refer: 14-109MR).
- SuperHelp Australia paid a $10,200 penalty after making potentially misleading statements about the cost of setting up SMSF (refer: 14-051MR).
- Media Super paid $10,200 in penalties for potentially misleading SMSF ads (refer: 14-001MR).
- Spring Financial Group entered into an enforceable undertaking following ASIC concerns about the level of monitoring and supervision of its representatives (refer: 13-263MR).
- Anne Street Partners agreed to engage an independent expert following ASIC concerns about SMSF advice provided to clients (refer: 13-248MR).
- We published Report 337 Improving the quality of advice given to SMSF investors. (refer: 13-081MR).
SMSFs will continue to be a focus in ASICs enforcement work.
Editor's note 1:
On 12 July 2016, declarations were filed at the Adelaide Magistrates Court. The matter was listed for return on 22 September 2016 in the Adelaide Magistrates Court for Mr Nowak to enter a plea.
Editor's note 2:
On 22 September 2016, the matter was adjourned until 13 October 2016.
Editor's note 3:
On 13 October 2016, the matter was adjourned until 10 November 2016.
Editor's note 4:
The matter has been further adjourned until 19 January 2017.
Mr Bernard Meehan, a former mortgage broker for AHL Investments Pty Ltd (trading as Aussie Home Loans), has been permanently banned from engaging in credit activities by ASIC.
ASIC's investigation found that Mr Meehan had submitted payslips, document checklists and loan serviceability forms in nine home loan applications to Westpac Banking Group (Westpac) over a twelve month period from January 2014 to January 2015, that were false or materially misleading. Among the false documents were payslips that had not been issued by the purported employer.
ASIC found that Mr Meehan's actions were wrong, inconsistent with a compliance mentality and showed a lacked of insight into what was required of a broker. Mr Meehan failed to adhere to proper procedures and did not accept wrongdoing or show appreciation of the fact that what he did involved failure to comply with credit legislation.
Aussie Home Loans reported the misconduct to ASIC.
ASIC's Deputy Chairman Peter Kell said, 'Gatekeepers, such as banks, aggregators and franchise groups have an important role to play in regulating the mortgage broking industry and act as a first line of defence to detect inappropriate practices and behaviour.'
Mr Meehan has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Since becoming the national regulator of consumer credit on 1 July 2010, ASIC has investigated in excess of 100 matters relating to loan fraud and has achieved many enforcement outcomes against the offenders.
The outcomes range from undertakings by persons to voluntarily leave the industry to bans and prosecutions. To date, ASIC has banned 74 individuals or companies from providing credit services (including 32 permanent bans).
Through the Commonwealth Director of Public Prosecutions, ASIC has also brought criminal prosecutions against 14 credit service providers; with 12 having been convicted of fraud or dishonesty offences relating to the provision of false and misleading information/documents to lenders in client loan applications.
Mr Meehan is the fourth Aussie Home Loans mortgage broker who has been permanently banned and/or convicted over the past 18 months for submitting false or misleading documents in loan applications. The other three mortgage brokers were:
- Mr Madhvan Nair – convicted on eighteen charges involving the submission of false or misleading information to Westpac, National Australia Bank, and ANZ, see 16-219MR and 16-293MR.
- Ms Emma Feduniw – convicted and permanently banned for providing false documents in eight loan applications to Westpac, see 16-108MR, 16-186MR and 16-242MR.
- Mr Shiv Prakash Sahay – convicted and permanently banned for providing false documents in loan applications for seventeen of his clients to Bankwest and Suncorp Metway Limited, see 15-176MRand 15-128MR.
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.
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.
*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.
ASIC has banned Adelaide financial adviser Michael Mahoney from providing financial services for a period of four years.
Mr Mahoney was employed by the BT Financial Group Pty Ltd (BTFG) in the Westpac Scaled Advice Insurance business from October 2013 to July 2014 to provide general advice only to retail clients on insurance products.
ASIC's investigation found that during the period Mr Mahoney was employed at BTFG, he engaged in conduct that was misleading and deceptive. Specifically, he entered false information regarding various clients' health or health-risk factors in telephone applications for insurance policies issued by Westpac Life Insurance Services Ltd (WLIS). This resulted in WLIS issuing policies to clients based on false information and assuming greater risks without having an opportunity to undertake an assessment of those risks.
WLIS has agreed to honour the affected client policies.
ASIC Deputy Chairman Peter Kell said, 'This outcome shows that ASIC expects employees who are providing financial services to maintain high standards and not engage in conduct that is misleading and deceptive.'
Mr Mahoney has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.
This outcome is a result of ASIC's Wealth Management Project. The Wealth Management Project was established in October 2014 with the objective of lifting standards by major financial advice providers. The Wealth Management Project focuses on the conduct of the largest financial advice firms (NAB, Westpac, CBA, ANZ, AMP and Macquarie).
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;
- 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 Mahoney:
- Damian O'Rourke (refer: 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 (refer: 16-124MR)
- Gerard McCormack (refer: 16-059MR)
- Shane Thompson (refer:16-022MR)
- Ben Rickman (refer:16-006MR)
- Ben Cheung (refer: 16-004MR)
- Mark Tidbury (refer: 15-383MR)
- Amanda Ritchie (refer: 15-294MR)
- Stuart Murray Jamieson (refer:15-288MR)
- Sharnie Kent (refer: 15-286MR)
- Alfie Chong (refer: 15-259MR)
- Martin Hodgetts (refer: 15-218MR)
- Shawn Hickman (refer: 15-213MR)
- Brett O'Malley (refer: 15-121MR)
- Brian Farber (refer: 15-178MR), and
- Rebecca Locksley (refer: 15-070MR).
ASIC has permanently banned Mr Sandeep Madhoji from providing financial services or engaging in credit activity after he was sentenced to imprisonment for fraud charges. This prosecution was the result of a joint operation between the Queensland Police Service and ASIC.
The charges stemmed from conduct that occurred between 2 September 2010 and 11 July 2012. During this period, Mr Madhoji misused clients' funds by applying some client's funds to cover the loss made on other client portfolios.
As a result of Mr Madhoji's actions, 14 clients collectively lost $3,251,281. These losses were incurred by Mr Madhoji using his recommended trading strategy.
Mr Madhoji made false statements to his licence holder Redwood Capital Group and to his clients to conceal his losses. He acted outside his authority by making multiple unauthorised transfers and withdrawals from the accounts to hide the losses. Mr Madhoji also falsified client account statements in relation to the relevant transactions.
Mr Madhoji committed these offences to enhance his reputation to clients and create an illusion that he was a highly successful trader.
ASIC Deputy Chairman Peter Kell said, 'Dishonesty by any financial advisor will not be tolerated by ASIC. We will investigate and prosecute instances of dishonesty to ensure that consumers have confidence in the financial system.'
On 26 August 2016, Mr Madhoji was sentenced to 7.5 years imprisonment with a non-parole period of 22 months in the Brisbane District court on 55 charges of fraud under sections 408C of the Queensland Criminal Code.
Mr Madhoji was an Authorised Representative under Redwood Capital Group Pty Ltd, AFSL No. 289327. AFSL No. 289327 held by Redwood Capital Pty Ltd was cancelled on 9 April 2013.
Mr Madhoji's status as an Authorised Representative was ceased on 1 July 2012.
This matter was prosecuted by the Queensland Director of Public Prosecutions.