Conviction for stealing superannuation leads to permanent financial services ban

ASIC announced that it has permanently banned Mr Craig James Wilson from providing financial services or engaging in credit activities. The move by the regulator comes after Mr Wilson was convicted in August of four counts of ‘stealing as a servant’ by the District Court of Western Australia.

ASIC said: “Between 25 October 2017 and 23 January 2018, four of Mr Wilson’s clients received payments into their bank accounts from their superannuation funds. Due to Mr Wilson’s planned actions, the clients received more than they had requested to be withdrawn. The clients then asked for funds to be returned. Mr Wilson provided his own personal bank details for the return of funds, totaling $101,800.” Read more...

Almost $9 million in penalties for loans tied to financial advice

The Federal Court has imposed almost $9 million in penalties on a financial services and credit business.

The firm, Financial Circle, was offering personal loans to consumers of up to $5,000 if they received and implemented financial advice.

“The advice typically recommended purchasing personal insurance products and switching superannuation providers,” said ASIC.

“When consumers implemented the advice, significant advice fees were paid to Financial Circle directly from the consumer’s superannuation. Financial Circle also received ongoing commission payments from the insurers. This process often resulted in a substantial erosion – in many cases up to 30% – of the client’s superannuation balances.” Read more...

Former financial adviser Satvir Singh Birk sentenced to 2.5 years jail

A former financial adviser, Satvir Singh Birk, has been sentenced to two and a half years imprisonment.

ASIC announced that Mr Birk, in May 2018, “pleaded guilty to five counts of dishonestly using his position as director of The Carter Group with the intention of gaining an advantage, for himself or others, in the amount of approximately $800,000” and has now been sentenced.

ASIC alleged that Mr Birk “caused cheques to be drawn on a client’s superannuation account without authorisation” and “deceived some clients as to the use of funds withdrawn from their superannuation funds”. Read more...

ASIC cancels financial services licence, due in part to SMSF set up advice

ASIC is going to cancel a financial services licence, in part relating to not acting in the best interest of clients when advising the set up of SMSFs.

ASIC announced that it would cancel the AFSL of Austplan Pty Ltd, effective from 25 November 2018, by agreement with the licensee.

“ASIC was concerned about Austplan’s ability to do all things necessary to ensure the advice provided by its representatives was compliant,” said the regulator.

Surveillance found “deficiencies” in the financial services of a number of Austplan representatives, including failing to act in the best interest of their clients when establishing an SMSF. Read more...

ASIC Deputy Chair Peter Kell resigns, effective December 6

It has been announced that ASIC Deputy Chair Peter Kell will resign, effective 6 December.

Mr Kell has been an ASIC Commissioner since November 2011, and Deputy Chair since May 2013. He was reappointed as Deputy Chair for a one-year period from May 2018 by then Minister for Revenue and Financial Services Kelly O’Dwyer.

“His experience and understanding of corporate regulation has been appreciated by successive governments as well as members of ASIC,” said a statement from Treasurer Josh Frydenberg. Read more...

ASIC plans to increase regulatory scrutiny on superannuation

ASIC plans to increase the intensity of its regulatory scrutiny on the superannuation sector, including more shadow shopping.

ASIC Commissioner John Price told a recent conference that the regulator was strengthening its supervision of, and enforcement on, the superannuation sector.

“Another new project we will be implementing is to deliver an enhanced supervisory approach for superannuation. We have already strengthened our team focused on this area,” he said.

This will include building on “public actions in the superannuation sector, including more enforcement outcomes”, and better leveraging new and existing data available to ASIC and APRA. Read more...

ANZ & CBA accept Undertaking over distribution of super products in branches

The ANZ and CBA have reached an agreement with ASIC to change how they distribute some of their superannuation products.

ASIC announced that it has accepted enforceable undertakings from the two banks, following an investigation.

The regulator says it found the banks had a “common practice” of offering their superannuation products – Smart Choice Super for ANZ and Essential Super for the CBA – to customers at the conclusion of a fact-finding process. ANZ called its process an ‘A-Z review’ and CBA called theirs a ‘Financial Health Check’. Read more...

No “systemic” issue of unlicensed accountant SMSF advice: ASIC

ASIC says a review seeking to identify accountants recommending clients set up SMSFs while not holding a financial services licence found “no systemic concerns”.

Though the review did find “significant levels” of inaccurate and out of date information on the websites and in the marketing material of accountants. This seemingly led ASIC to initially target accountants who were then found to be complying with the law.

ASIC says it used a range of information to identify accountants who may have been giving unlicensed SMSF advice, including data from the ATO, AFSL applications, analysis of social media, public advertisements and reports from the public. Another source of information was ASIC’s ongoing project investigating the quality of SMSF advice. Read more...

Spaceship super fund fined by ASIC over misleading investment claims

ASIC has imposed penalties on the promoter and trustee of the Spaceship super fund for misleading claims about its investments.

ASIC announced that $12,600 Infringement Notices have been issued on, and paid by, Spaceship Financial Services Pty Ltd – the promoter of the fund – and Tidswell Financial Services Pty Ltd – the trustee of the fund. These penalties relate to concerns by the regulator about “misleading claims about the ‘fundamental investment philosophy’ of the Spaceship Super Fund’s ‘GrowthX’ portfolio”. Read more...

ASIC asks Court to appoint liquidator for Superfunded

Update: The Federal Court has made orders for Superfunded to be wound up

ASIC Commissioner John Price said: “This case serves as a reminder to consumers approached to set up self -managed super funds, to take care to ensure they are not being drawn into schemes that may involve illegal early access to superannuation.”

ASIC has applied to the Federal Court for a liquidator to be appointed to Superfunded Pty Ltd, a company that the regulator says was unlawfully carrying on a financial services business involving recommending the set up of SMSFs. Read more...