16-312MR ASIC permanently bans former company director in relation to fraudulent misappropriation

ASIC has permanently banned Mr Steven William Hill from engaging in credit activities and providing financial services.

An ASIC investigation found that between January 2006 and February 2007, Mr Hill, through Hill Stephens & Associates Pty Ltd and International Finance Consortium (Aust) Pty Ltd induced various investors to pay approximately $618,000 to acquire interests in a 'house and land' property development located in Queensland.

Mr Hill was found guilty of fraudulently misappropriating $281,000 of the invested funds, which were directed to company bank accounts to make payments to Mr Hill and other third parties.

On 18 April 2016, His Honour Acting Judge Garling sentenced Mr Hill to 2 years and 9 months jail for fraudulent misappropriation (refer: 16-118MR).

Following the sentencing, ASIC determined that Mr Hill should be permanently banned as he was convicted of offences involving dishonest and fraudulent conduct.

ASIC Commissioner Peter Kell said Mr Hill's misconduct was very serious.

'ASIC will ban people from the finance industry who act dishonestly and place personal interests ahead of those they service.  Mr Hill's actions exposed vulnerable members of the community to financial loss and hardship', Mr Kell said.

Mr Hill has the right to appeal to the Administrative Appeals Tribunal for review of ASIC’s decisions.

Background

ASIC investigations revealed that between January 2006 and February 2007, Mr Hill met with various investors based in New South Wales.  Describing himself as a 'financier/consultant', Mr Hill, through his company Hill Stephens & Associates Pty Ltd, told investors he would be able to provide them with investment opportunities to build their wealth towards retirement.

Mr Hill advised investors their funds would be used as 'seed capital' in a number of Queensland based property developments he was facilitating. Mr Hill advised investors that they would receive returns of between 10 - 30% per annum, however, unknown to the investors, funds paid were not invested in the property developments as originally advised by Mr Hill.

In June 2013 Mr Hill was charged with eight counts of fraudulent misappropriation (refer: 13-146MR).

In March 2015 Mr Hill was ordered to stand trial on seven counts of fraudulent misappropriation (refer: 15-050MR).

In March 2016 Mr Hill was convicted on 6 counts of fraudulent misappropriation by a Sydney District Court jury after a four-week trial. (refer: 16-072MR).

Mr Hill was found not guilty of one charge of fraudulently misappropriating $150,000.

16-305MR ASIC accepts enforceable undertaking to address compliance failures of Perth financial advice firm

ASIC has accepted an enforceable undertaking (EU) from Neo Financial Solutions Pty Ltd (Neo) following concerns about the adequacy and application of Neo’s risk management and compliance frameworks.

Under the EU, Neo will engage an independent expert to assess, report and make recommendations about Neo’s risk management and compliance frameworks.

NEO is based in Perth, Western Australia with approximately 160 individual and corporate authorised representatives.

The EU follows an ASIC surveillance of Neo's’s business. ASIC's surveillance focussed on Neo’s general obligations as an Australian financial services (AFS) licensee and included a review of its compliance and risk management framework including its programs, policies, procedures and controls. ASIC’s surveillance also tested financial product advice provided to retail clients and the internal advice audits and remediation reviews conducted by Neo.

ASIC's advice concerns included failing to address important client objectives, not making reasonable enquiries to determine all relevant client circumstances and not fully considering the consequences when replacing existing financial products.

ASIC's surveillance indicated that Neo failed to employ appropriate risk management and compliance frameworks having regard to the nature, size and complexity of its business, which had grown considerably since its inception. In particular, in ASIC's view, Neo had:

• inadequate resources to carry out monitoring and supervision;
• inadequate identification, recording and assessment of risks;
• audit and remediation programs which were not timely and effective in identifying and remediating advice conduct and deficiencies;
• vetting policies and procedures which were not consistently applied or adequate to manage compliance risks; and
• failed to take reasonable steps to ensure its authorised representatives complied with financial services laws.

ASIC Deputy Chairman Peter Kell said, ‘As this matter shows, inadequate risk management and compliance frameworks, combined with deficient application of a licensees' systems and controls can result in the provision of advice that does not serve the best interests of clients.

'ASIC is committed to raising standards across the financial services industry. We expect licensees to dedicate sufficient resources to appropriately monitor and supervise high risk and newly appointed authorised representatives and to remedy poor advice in a timely manner', Mr Kell said.

ASIC acknowledges the co-operation of NEO's management in resolving ASIC's concerns.

• View the enforceable undertaking

15-070MR ASIC bans Commonwealth Financial Planning employee

ASIC has banned Commonwealth Financial Planning Limited (CFPL) employee Rebecca Locksley from providing financial services for 18 months, after finding she created false documents for client files.

Ms Locksley of Merewether, New South Wales, was the servicing planner of banned former CFPL adviser Jade Zaicew from 2011 to 2012.

ASIC's investigation found Ms Locksley engaged in misleading and deceptive conduct between February 2012 and May 2012 when preparing documents for Mr Zaicew's files.

Ms Locksley prepared file notes containing fictional conversations between Mr Zaicew and his clients to give the impression that the files were in proper order and that Mr Zaicew had given advice to the clients in accordance with the law.

While Mr Zaicew was suspended from CFPL, Ms Locksley also prepared and backdated around 40 other documents, including records of advice, to give the impression they had been prepared at the time of the client transactions.

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

Background

In April 2014 ASIC banned Mr Zaicew from from engaging in credit activities and providing financial services for a period of seven years (refer: 14-068MR).

Mr Zaicew's banning followed a number of actions against former CFPL financial advisers Ricky Gillespie (refer: 12-269MR), Joe Chan (refer: 12-111MR), Anthony Awkar (refer: 12-81MR), Jane Duncan (refer: 12-80MR), Christopher Baker (refer: 12-63AD), Simon Langton (refer: 12-02AD), and Don Nguyen (refer: 11-42AD).