Contempt of court orders against Joshua David Fuoco – January 25, 2024
The Commission has filed a contempt application against the former director of Wealth & Risk Management Pty Ltd Joshua David Fuoco – who was ordered by the Federal Court in February 2018 not to carry on or be involved in a financial services business for 10 years.
Allegedly, between March 2019 and April 2023, Fuoco contravened these orders by being involved in five financial businesses:
- State Advice Pty Ltd;
- Ansa Finance Pty Ltd;
- AFSL Group Pty Ltd;
- About Advice Pty Ltd; and
- Advice Now Pty Ltd.
In the 2018 orders, Fuoco was found to be contravening financial services obligations and involved in unconscionable conduct. He was ordered to pay pecuniary penalties of A$650,000 ($428,249) and A$50,000 ($32,942) in costs. His businesses were also ordered to pay penalties of A$7.15m ($4.7m).
Now, ASIC seeks orders against Fuoco for contempt of court – which may include a fine, asset sequestration or a term of imprisonment.
Former adviser pleads guilty to insider trading – January 24, 2024
Former corporate adviser Cameron Waugh has pleaded guilty to insider trading connected to the gold exploration and mine development company Genesis Minerals Limited.
Allegedly, between September 14 – 21, 2021, Waugh applied and subsequently acquired 747,626 shares in Genesis while he was in possession of inside information regarding a funding proposal that included a multi-million-dollar placement of Genesis shares, and a restructure of the board to include Raleigh Finlayson and Neville Power.
When the information, titled Raleigh Finlayson to Cornerstone Strategic Funding Package’ went public on September 22, the Genesis share price rose 187%.
At the time of the offence, breaching s1043A of the Corporations Act held a maximum penalty of 15 years in prison.
Former company secretary pleads guilty – January 24, 2024
Jane Rosemary Flegg, the former company secretary of Continental Coal Limited (now in liquidation), has pleaded guilty to three criminal charges to:
- stealing about A$2.2m ($1.4m) of applicant funds from a Citation bank account;
- forging and uttering a Citation bank statement that falsely showed A$675,658 when in fact it only held A$117.55 ($446,191 – $78); and
- giving false or misleading information to the ASX, where Continental Coal failed to disclose its only income-generating asset had gone into administration and another statement that said that assets had been falsely sold.
Sentence will fall on March 7, 2024.
Cancelled AFS licence for Indie Advice – January 23, 2024
The Australian financial services (AFS) licence has been cancelled for Sydney-based financial services provider Indie Advice Pty Ltd after findings that the company has not been providing financial services for some time.
Indie Advice has held an AFS licence since October 2018, and was authorized to provide financial product advice to retail and wholesale clients.
A$53,280 penalty over allegedly misleading statements – January 22, 2024
Penta Capital Pty Ltd has agreed to pay A$53,280 ($35,003) to comply with four infringement notices – over alleged claims of making false and misleading statements on its website between May 2022 and February 2023.
On the website, Penta Capital claimed to have:
- managed $6.9 billion on behalf of retail, wholesale and institutional investors;
- held A$350m in assets under management;
- been in operation for 25 years (1997 to 2022); and
- received sponsorship or approval from, or was affiliated with, the Financial Services Council, Australian Investment Council, Property Council Australia and Australian Investment Council.
Penta Capital has paid its first instalment towards the infringement notices, but if the company fails to pay the remaining instalments, ASIC may further investigate and file civil penalty proceedings.
Bank fined after pleading guilty to criminal charges – January 19, 2024
Members Equity Bank Limited has been ordered pay a A$820,000 ($541,061) penalty after pleading guilty to charges of making false and misleading representations and failing to provide required written notices regarding home loans.
Between May 25, 2018 and September 3, 2018, the bank sent 589 letters to home loan customers holding incorrect information on minimum repayment amounts after the expiry of either a fixed-rate or interest-only period. Each letter contained a wrong repayment amount that was less than the correct amount. The bank also failed to inform some customers about changing interest rate and minimum repayment sums.
Members Equity Bank pleaded guilty to:
- contravening sections 12DB(1)(g) and 12GB(1) of the ASIC Act 2001 when making false and misleading representations in letters to customers; and
- contravening s64(1) and s65(1) of the National Credit Code by failing to provide written notice about annual interest rate and repayment amount changes.
The penalty was comprised of A$750,000 ($494,580) for the charge under the ASIC Act, and A$70,000 ($46,161) for charges under the National Credit Code.
Conditions imposed on liquidator Steven Naidenov – January 17, 2024
A liquidator disciplinary committee has imposed conditions on the registered liquidator Steven Naidenov after he failed to perform his duties in an adequately and proper way, including contravening the Corporations Act 2001. Allegedly, Naidenov also used funds from an external administration bank account to pay the expenses of other related companies – which sometimes happened without adequate supporting documentation.
In summary, the committee has required that Naidenov arrange and personally pay for a peer review of six external administrations over the next two years.
The Committee also wants ASIC to stop Naidenov from taking on appointments as a liquidator until April 30, 2024.
ASIC news weeks 3-4
With about a quarter of AFS licensees still haven’t registered their financial advisers (as of January 18) and the closing date is coming up, ASIC now urges all to make the required registration. ASIC has also moved the closing date two weeks in recognition of the summer holiday period, which makes February 16 last day to register. From the 16th, all relevant providers, including time-share advisers, must be registered with ASIC. Provisional relevant providers are excluded from this requirement.
“The provision of personal advice by unregistered advisers is prohibited and carries significant penalties,” ASIC Commissioner Alan Kirkland said, and warns that failing to comply could incur significant consequences.
“After the revised deadline has passed, ASIC will begin a program to check compliance with this requirement and will take enforcement action where we identify advisers who have provided advice while unregistered.”
Legislative instruments and changes
ASIC is proposing to remake managed investment scheme legislative instruments which are due to sunset on April 1, 2024, and proposes remaking the class orders for a period of five years. Stakeholders are encouraged to provide feedback on:
- ASIC Class Order [CO 13/1200] Periodic statements relief for AQUA quoted and listed managed investment scheme manager;
- ASIC Class Order [CO 13/1406] Land holding for primary production schemes;
- ASIC Class Order [CO 13/1409] Holding assets: Standards for responsible entities;
- ASIC Class Order [CO 13/1410] Holding assets: Standards for providers of custodial and depository services; and
- ASIC Class Order [CO 13/1621] Exemption and declaration for the operation of mFund.
Feedback can be submitted until February 16, 2024.
ASIC has also implemented legislative changes to the financial adviser exam, and has:
- removed the short answer questions and increased the number of multiple-choice questions; and
- removed the requirement limiting exam participation to new financial advisers who have completed an approved degree and existing providers.
The next exam will be held on March 26, 2024, and will reflect the changes.
