Financial planner's seven-year ban upheld

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The Administrative Appeals Tribunal has upheld ASIC’s decision to ban Mervyn Ross Tarrant of Albion Park, New South Wales, from providing financial services for seven years. 

In affirming ASIC’s decision, AAT found a banning order of at least seven years was appropriate because of numerous breaches of financial services laws.
 
“Those breaches have been serious and repeated. A consequence of the breaches has been significant loss to the retirement savings of investors…there is evidence of incompetence and negligent, if not wilful, breach,” AAT said.

Tarrant was the sole director and authorised representative of Tarrants Financial Consultants (TFC), a financial services firm in Wollongong which invested more than $23 million of its clients' funds in Astarra Strategic Fund – formerly known as the Alpha Strategic Fund – a managed investment scheme promoted by Trio Capital and Shawn Richard. 

On 25 November 2011, ASIC found Tarrant had not complied with various financial services laws and banned him from providing financial services for seven years. 

Tarrant subsequently applied to AAT for a review of ASIC's decision. On 7 December 2011, AAT ordered ASIC not issue any public announcement in relation to the banning order of Tarrant. 

On 20 December 2013, AAT affirmed ASIC's decision to ban Tarrant from providing financial services for seven years and revoked the publication order. AAT found the breaches by Tarrant were serious and included: 

· Failing to disclose in statements of advice the receipt of a marketing allowance from Shawn Richard for investing clients' monies in the Alpha Strategic Fund. From November 2008 to December 2009, an associate of TFC, Tarrants Finance, of which Tarrant was director, received more than $1.1 million in marketing allowance from Richard
· Making false or misleading statements about remuneration or benefits in statements of advice to clients
· Engaging in misleading or deceptive conduct by making various representations about remuneration or benefits to TFC's staff by including the representations in powerpoint presentations that TFC's staff delivered to clients
· Failing to have a reasonable basis for the advices he provided to eight clients. Each of the eight clients were recommended to borrow a significant amount of money, invest a high proportion of their investments in the ASF, and set up a self-managed superannuation fund to allow the superannuation funds to be invested in the ASF. 
 
“The seriousness of Mr Tarrant's behaviour – which was highlighted by the AAT as being incompetent and negligent – meant that ASIC took all the necessary steps to ensure he was removed from the industry for a substantial period of time,” deputy chairman Peter Kell said.
 
Since ASIC's Trio investigation started in October 2009, more than 11 people have either been jailed, banned from providing financial services, disqualified from managing companies or have agreed to remove themselves from the financial services industry for a total of more than 50 years.

Shawn Richard, former investment manager of the Astarra Strategic Fund, was sentenced to 3 years and 9 months jail in August 2011, and Eugene Liu, ASF's chief investment strategist, was permanently banned from providing financial services in March last year.