Morrison Carr director Dennis Cardakaris hit the headlines this week when ASIC slapped him with a lifetime ban, and the regulator has now revealed the shocking details of the case.
The regulator announced earlier this week that it had decided to cancel both the Australian financial services licence and the Australian credit licence of Morrison Carr Financial Services, as well as permanently banning Cardakaris – the company’s sole director – from providing financial services and engaging in credit activities.
The financial advice community was quick to ask for the details behind ASIC’s decision to impose the hefty penalties on Cardakaris and his company, and the regulator has now come out all guns blazing with its response.
According to ASIC, the decision to cancel Morrison Carr’s licenses and permanently ban Cardakaris stemmed from a surveillance operation that had been in operation since October 2011.
A statement from the regulator has noted that it “was concerned that Cardakaris was not of good fame and character given evidence he provided false information to its insurer and took steps to avoid client claims”.
ASIC’s key claims are as follows:
Morrison Carr did not have in place adequate compensation arrangements;
Cardakaris was not of good fame and character or a fit and proper person to engage in credit activities in that he provided false information in relation to an application for professional indemnity insurance and arranged for the transfer of business from a previous AFS licence, Morrison Carr Australia and in doing so, affected the ability of claimants of the previous licensee to pursue their claims;
ASIC has reason to believe that Cardakaris will not comply with financial services laws; and
Cardakaris has been involved in the contravention of credit legislation and ASIC has reason to believe that he is likely to contravene credit legislation.
In a damning assessment of Cardakaris’ conduct, ASIC Commissioner Peter Kell noted the Commission’s concerns that Morrison Carr and Cardakaris did not conduct their business in a fair, honest or professional manner, which is fundamental to maintaining integrity within the financial advice sector.
“Licensees must take responsibility for the accuracy and completeness of the information they provide to their insurers, clients and ASIC. Mr Cardakaris was someone with a lot of experience in the financial services industry who should have known his responsibilities. Ultimately, licensees may choose to seek assistance from external consultants but they cannot outsource responsibility for the information provided,” he said.
“ASIC is committed to identifying instances of poor practice and removing those who do not meet the required performance and compliance standards. The compliance and broader legal requirements procedures are in place to provide important safeguards for clients.”
Morrison Carr was a national financial planning business, based in Sydney. It provided financial planning and credit advice via its network of 42 authorised representatives and seven credit representatives located in offices around Australia.
ASIC will ask all representatives of Morrison Carr to communicate the consequences of the licence cancellation to their clients.
Cardakaris retains the right to seek a review in the Administrative Appeals Tribunal (AAT) of ASIC’s decision to permanently ban him from providing financial services and engaging in credit activities.
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