June 14, 2024
ASIC’s January activity hints at increased enforcement action


ASIC has detailed to the Senate Economics Committee why it decided to pursue action against Dixon Advisory rather than the individual advisers involved in the wrongdoing. 

The problems surrounding Dixon, which have resulted in over 2,500 complaints made to the Australian Financial Complaints Authority (AFCA), cover conflict of interest and inappropriate advice after clients were advised in the US Masters Residential Property Fund (URF) and URF-related products, which were issued and operated by related companies to Dixon Advisory.

Appearing before the committee on 4 June, deputy chair Sarah Court was asked by Senator Andrew Bragg about the enforcement action taken by ASIC and whether it had done enough. 

He also questioned why ASIC had opted to pursue against Dixon Advisory rather than the individual advisers.

Responding, Court said: “ASIC investigated the provision of financial advice to a subset of Dixon clients because ASIC was concerned advisers were providing advice that was not in the best interest of those clients. We focused on the entity as opposed to taking action against individual advisers because Dixon held the AFSL. Dixon has an obligation to ensure that advisers under its AFSL are doing so in full compliance with corporations law. 

“We filed that in 2020 and the court found in ASIC’s favour. The court imposed a civil penalty of $7.2 million together with $800,000 in costs. That amount was a significant penalty at the time for this kind of conduct.”

However, this $7.2 million penalty was unable to be paid in full as Dixon went into voluntary administration in 2022. 

“Dixon went into voluntary administration in January 2022 and ASIC suspended the AFSL a few months thereafter so it’s not surprising that it has not paid the pecuniary penalty,” Court continued.

“In relation to Evans & Partners holding company, ASIC did consider if it could take action but the way our laws work is we have to deal with the entity that is engaged in the conduct, and there was no evidence that Evans & Partners was involved in the conduct. 

“We also investigated the various directors of Evans & Partners and Dixon, and we have taken subsequent action in relation to one of those who we consider did have culpability. 

“Far from not taking action, I would suggest we have taken considerable action. We are very aware of the public’s interest, but this is where we have ended up.”

She said it is a decision taken on a “case by case basis” whether ASIC pursues the individual advisers or the AFSL holder.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *