Mark McCabe pleads guilty to three counts of fraud – September 16, 2024
Former financial services director Mark Francis McCabe has pleaded guilty to three offences of fraud, where he dishonestly obtained financial advantage by deception contrary to s192E(1)(b) of the Crimes Act 1900.
He obtained A$940,350 ($636,102) from eight victims between October 2015 and May 2020. Investors thought they were gaining access to real foreign exchange trading accounts with access to capital funds to trade in a profit share arrangement.
However, McCabe only provided test accounts where trading was not possible, and instead misappropriated the funds to pay for his own business and personal expenses, including rental payments, private school fees and credit card purchases.
Sentence will fall later, with four other offences to be taken into account.
Interim stop orders on Candy Club – September 16, 2024
Two interim stop orders have been issued on Candy Club Holdings Limited in relation to one public offer made connected with the back door listing of Scalare Partners Pty Limited, and a target market determination (TMD) connected with the offer. The orders were made due to concern over not disclosing all required information, such as potential risks of expanding to the US, and valuation and performance factors.
The company is currently suspended from trading on the Australian Securities Exchange, and the interim stop orders will prevent Candy Club from offering or issuing securities under the relevant prospectus, or to provide financial advice connected to the TMD.
The orders are valid for 21 days unless revoked earlier. To date, ASIC has issued a total of 88 interim stop orders and one final stop order under the design and distribution obligations.
Court updates
Daniel Kirby guilty of dishonest conduct and misuse of company funds – September 18, 2024
Former director Daniel Kirby has pleaded guilty multiple charges regarding to Berndale Capital Securities Pty Ltd – a retail over-the-counter derivatives provider which collapsed, including:
- one count of dishonest conduct in relation to a financial service;
- one count of dishonest use of his position as a director; and
- one count of providing false or misleading information to an auditor.
The company’s AFS license was cancelled in late 2018 due to multiple concerns, for example failing to comply with reporting obligations or with statutory notices. Kirby was also found illegally transferring company funds to himself and other associates and entities, where some of the transactions happened “mere hours after Berndale’s licence had been cancelled.”
Retail Employees Superannuation case dismissed – September 18, 2024
Retail Employees Superannuation Pty Ltd has been found not to be making misleading representations about limitations on members’ rights to transfer superannuation funds out, the Federal Court found.
According to ASIC, the alleged violations happened in the Retail Employees Superannuation Trust between March 2015 and May 2018, and the Commission has 28 days to lodge any appeal to the Full Court of the Federal Court if it so wishes.
ASIC news week 38
Mandatory climate reporting in 2025
Starting on January 1, many large businesses and financial institutions will have to prepare annual reports carrying mandatory climate-related financial disclosures, and Commissioner Kate O’Rourke is now urging firms to start preparing for it.
“This is a significant reform that will have far-reaching implications for many of our key stakeholders,” O’Rourke said. “We will take a proportional and pragmatic approach to supervision and enforcement as industry adjusts to these new requirements.”
To help with the reporting and the new regime, a dedicated sustainability reporting page has been established to provide information and how ASIC will administer it. “We encourage reporting entities to refer to this page as an ongoing resource as it will be updated with further information and regulatory guidance,” O’Rourke added.
Speech
On September 17, ASIC Chair Joe Longo spoke at the Australian Compliance Institute Annual Conference about effective and true compliance. He said compliance in practice needs a culture of integrity, ethics, and trust in how people work – and not just complying with rules.
“When there’s alignment between what’s preached and what’s practised, it’s much easier to nurture trust by consumers and investors,” Longo said. “A profitable business is – and must be – a compliant one.”
Longo also highlighted that it’s the directors that need to set the tone to establish and lead a culture of compliance.
Regulatory Guide 121 update
An updated version of Regulatory Guide 121 Doing financial services business in Australia has been released to reflect law and legislative relief changes. This version will replace the one issued in June 2013, and includes changes such as amendments to AFS licensing exemptions and relief, and an update to the Courts’ interpretation of ‘carrying on a business in Australia’.
