ASIC has released a statement calling for advisers and other financial services professionals to cooperate when it comes to enforcement, saying “cooperating with ASIC may benefit a person or company in many ways.”
Between July and December last year, ASIC had 88 enforcement outcomes in financial services, market integrity and corporate governance. Half of these involved cooperation, including negotiated outcomes, early guilty pleas and enforceable undertakings (EU).
For example, in November ASIC accepted an EU from Terence Webb, a financial adviser formerly employed by Storm Financial, after concerns Webb might not have had a reasonable basis for the advice that he provided, or may have provided incomplete or inaccurate advice to his clients. Webb was required to complete specified courses of professional development within 12 months, and submit to a regime of supervision, audit and review of the financial services he provides to clients by an ASIC approved independent senior financial planner for two years.
ASIC says “cooperation will be relevant to [its] decision on the type of enforcement action to pursue or remedy to seek.”
“A cooperative approach could mean a quicker resolution of the action taken for the misconduct, time and cost savings for ASIC, and better outcomes for affected consumers,” says ASIC deputy chairman Belinda Gibson.
Senior lawyer at The Fold, Hillary Ray, says ASIC won't be as harsh with those who cooperate, particularly when it comes to comments in the press. Ray referred to ASIC's treatment of Macquarie and said advisers could avoid a lot of bad press, and in turn, a bad rep, by working with the regulator.
According to ASIC’s report, actions taken by the regulator during July-December 2012 include:
The AFS license and credit licence of Morrison Carr Financial was cancelled, and its sole director, Dennis Cardakaris, permanently banned
Court orders were obtained to permanently ban Melinda Scott from providing any financial services and disqualifying her from managing any corporations, after she defrauded clients of more than $3.6 million over eight years
Simon Turudia was banned from providing financial services for six years for the unlawful early release of approximately $1.7 million in super benefits
Alec Khoo and Peter Holt were banned from providing financial services for three years
Ropati Broederlow was permanently banned from providing financial services, for being unlicensed, acting dishonestly and making false or misleading statements
Phillip Paddison was permanently banned from providing financial services, for engaging in dishonest conduct that involved more than 100 clients and over $150,000 of client funds.