The Turnbull government’s Royal Commission is putting the financial services industry under the spotlight, with many people wondering what to do if they have been a victim of bad financial advice.
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.
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:
As part of its Wealth Management Project, ASIC has banned the following advisers from the financial services industry, in addition to Mr Mahoney:
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.
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.
