Ex Director and CEO found guilty of dishonest conduct – November 14, 2024
Lyndon Allen Kingston, former Director and CEO of Bananacoast Community Credit Union Limited (BCU), has been found guilty of dishonest conduct on:
- two counts of dishonestly using his position with the intention of gaining an advantage; and
- two counts of providing misleading information to BCU’s auditor.
Charges on two other counts were discharged.
Cbus sued for alleged systemic claims handling failures – November 12, 2024
Civil penalty proceedings have commenced against United Super Pty Ltd, the trustee of the Construction and Building Unions Superannuation Fund (Cbus), for failing to properly handle death benefits and total and permanent disability (TPD) insurance claims.
Allegedly, from September 2022 to November 2024, Cbus failed to proceed claims within the set 90 days – which affected more than 10,000 members and claimants. More than half of those were found to have been waiting more than 12 months.
United Super was found also to be failing to properly asses the scale of the issues despite receiving reports of them. The estimated financial loss by Cbus to members and claimants is believed to be A$20m ($13m).
And even though the matter was notified to the Cbus Risk Committee, it failed to also notify ASIC within the required 30 days, something which United Super also failed to do.
With these issues, ASIC alleges that Cbus contravened the Corporations Act section(s):
- 912A(1)(a) & (5A) by failing to handle the claims for death benefit payments and TPD insurance payments properly;
- 912DAA(1) and (7) for failing to lodge a reportable situation report within 30 days to ASIC; and
- 1308(5) for failing to take reasonable steps to ensure the breach report lodged on August 5, 2023, was not false or misleading.
“The additional anxiety and pain these delays caused compounded the issues these members and their families faced.”
Sarah Court, Deputy Chair, ASIC
With the proceedings, ASIC seeks penalties, declarations, adverse publicity orders and orders for compliance matters to be implemented.
Optix Australasia pays A$187,800 for lodging failures – November 12, 2024
Optix Australasia Pty Ltd has paid $187,800 ($122,824) to comply with an infringement notice where it failed to lodge financial reports.
The company, a small proprietary company ultimately controlled by South African listed firm KAP Limited, self-reported the alleged breach of not lodging its financial reports with ASIC for the year end June 30, 2023, plus earlier years. According to ASIC, the non-compliance issues were discovered after KAP took control of Optix.
Brett Trevillian sentenced to prison for forging reports – November 11, 2024
Brett Paul Trevillian, former director at Metal Alpha Pty Ltd, has been sentenced to three years imprisonment for forging reports to clients when he was the investment manager of AlphaThorn Pty Ltd.
Between April and October 2019, Trevillian was found forging four portfolio performance verification reports relating to two products offerings by AlphaThorn. He added false information about their performances and investment returns, faulty claims about how and who had verified actual trading, and forging the signature of an accountant.
He pleaded guilty to two counts of making a false document to obtain a financial advantage, breaching s253 of the Crimes Act (NSW).
“Mr Trevillian failed to fulfil his legal obligations, acted dishonestly, made false and misleading representations and breached the trust of those he was engaged to act for.”
Sarah Court, Deputy Chair, ASIC
AlphaThorn is now operating under the name Trading Life Services Pty Ltd, and the investigation also resulted in the banning the company and former director Gabriel Yakob from providing financial services.
ASIC news week 46
Speeches
On November 14, both Chair Joe Longo and Deputy Chair Sarah Court spoke at ASIC Annual Forum 2024: Bridging generations – regulating for all Australians.
In the keynote opening, Longo spoke about multiple waves of reform, and the two dimensions of regulatory complexity; environment, and legislation and regulations. He said there can be complexity in how regulators interact with each other as well as how regulators can make matters worse and less effective by adding complex legislative instruments.
“I think it’s fair to say that many aspects of the current system aren’t working as they should. There are clear costs to business, and hurdles for consumers and investors,” Longo said, adding that a simpler, effective, and more enforceable regulatory system is needed.
“To all the consumers, business leaders and directors who have raised the issue of regulatory complexity with me – ASIC has heard you, and ASIC is going to act.”
Deputy Chair Sarah Court then made an opening speech at the Enforcement session, where she addressed ASIC’s highlights of this year, with a 25% increase in enforcement cases, and its many ‘first enforcement wins’. She focused on the newly announced enforcement priorities for 2025, saying that insurance and superannuation were two emerging areas of concern.
“Despite a challenging geopolitical situation, and pressing climate-related issues, all research points to cost-of-living pressures as the paramount issue of the time for Australians. Our enforcement and compliance work through 2025 will reflect that reality.”
At the Australian Financial Security Authority Summit on November 13, Deputy Chair Sarah Court spoke about what stewardship means to the Commission, and how its work promotes confidence in the credit system.
ASIC has started to see increasing financial distress among customers mid-2023, and noticed signs that some large lenders did not meet obligations to customers in financial hardship. Therefore, an open letter was sent to lenders setting out the regulator’s expectations.
“We then commenced an extensive data collection exercise, collecting 900,000 hardship notices from 30 lenders, relating to half a million credit accounts across a two-year period,” Court said, adding that ASIC also commenced a deeper review into 10 particular home lenders.
To promote confidence in the credit system, Court said that recent history has showed that “sustaining a culture of compliance is easier – and better for all – than the effort required to correct the course after the fact.”