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BFCSA: ASIC under fire: no transparency and therefore irrelevant existence for consumers

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Sending everyone into poverty - no home no money:   How does that assist the Australian Economy?  Would the Prime Minister please explain what can be done to this ASIC REGULATORY problem?  This email address is being protected from spambots. You need JavaScript enabled to view it.        Our petition on at 830 persons ripped of and suffering regulatory corruption from white collar criminals:  Calls for Royal Commission  

This is the link and thank you for support as this is sorely needed and long overdue:



Timid ASIC under fire over crackdown inconsistencies

Banking and Finance

Date September 6, 2014

Adele Ferguson

"What do you have to do to get banned for life?" federal politician Tony Smith asked the corporate regulator at a parliamentary inquiry in Melbourne on Friday.  Smith was referring to a three-year banning order slapped on financial adviser Peter Holt for providing inappropriate advice to retail clients, including gearing them up with margin loans and high-risk managed investment scheme (MIS) Timbercorp, which culminated in their financial ruin.

The tone of the questions by Smith, Senator John Williams and Senator Debra O'Neill, and the accusation that Holt's "inappropriate advice" was influenced by the payment of high commissions, put the blowtorch on ASIC and how it decides whether a financial adviser should be banned for three years, seven years or for life.  In Holt's case, ASIC banned him from providing financial services for three years after he failed to comply with "numerous" financial services laws. These included a failure to disclose the risks of switching a client's superannuation into high-risk products and a failure to ensure Holt Norman & Company maintained professional indemnity insurance.  Senator O'Neill said 40 former clients of Holt had come to her as part of a victims' action group. She said Holt Norman & Co Pty Ltd, was the largest distributor of Timbercorp, which lost hundreds of millions of dollars.  Not surprisingly, these victims – and the politicians at the parliamentary joint committee (PJC) hearing – asked why ASIC had been so lenient in its order on Holt and why he hadn't been banned for 10 years or for life. Holt's banning order will be lifted next year, enabling him to again offer financial advice.

Holt is not the only financial adviser that has ASIC has been accused of going light on, or not acting against at all.  In the case of Rollo Sherriff, a former star financial planner with Meridien Wealth, a former authorised representative of the Commonwealth Bank's Financial Wisdom arm, there was no ban.  Sherriff was operating at the same time as financial planners Don Nguyen, Ricky Gillespie and others were riding high in another financial planning arm of the bank, Commonwealth Financial Planning. All up ASIC banned eight financial planners at CBA and, after investigating Sherriff, decided not to proceed because he was no longer operating in the industry.

Sherriff's conduct caught the attention of the professional body, the Financial Planning Association, which culminated in a decision in October 2004 to withdraw his status as a certified financial planner for five months. At the time, Sherriff and CBA's Financial Wisdom fought this disciplinary action. Around that time CBA compensated a number of his customers, who had lost most of their life savings. All up, CBA has paid out more than $7 million in compensation to his clients and recently reopened its compensation scheme to customers of Meridien Wealth as part of a licence condition.  In March and November 2010, ASIC received two breach reports from CBA. A Freedom of Information request showed that, inside ASIC, Sherriff was being discussed by senior officers, including deputy chairman Peter Kell, who received an email containing "a summary of the reasons to withdraw from action in relation to Rollo Sherriff" in 2013. This email was sent more than three years after the initial breach report by Commonwealth Bank. The FOI did not disclose the contents of the email.

In a statement ASIC said it had considered a range of factors before deciding not to take action against Sherriff, including his decision to leave the financial services industry.  Senator Williams grilled ASIC on that decision but the corporate regulator remained rock solid on its decision. "If I rob a bank and stop robbing it, that's OK, I get off," he said.  Rick Gillespie was banned for life for forgery, but with no criminal action, and Don Nguyen, was banned for seven years and can reenter the market in 2018.

The point of this is there is no consistency in the approach, or transparency in terms of how ASIC's delegates decide on penalties. Hearings are conducted in secret and the decision is confidential. Only the outcome is published.  What ASIC's chairman Greg Medcraft did say was that delegates kept in mind what the Administrative Appeals Tribunal might think if the banning order was appealed. This is quite an insight and epitomises the cultural timidity of ASIC. The regulator should go in hard rather than pre-empt what might or might not happen if the financial adviser decides to challenge the order.


The crisis in confidence in the financial planning industry has been brewing for years. ASIC revealed that there have been 900 breach reports against planners filed in the past year. This is quite revealing given there are 38,000 financial planners in the industry.  For CBA whistleblower Jeff Morris, a former financial planner, moves to reform the financial planning industry and rid it of long-term inadequacies and conflicts should begin with a new regulator. "As a whistleblower, I came face to face with ASIC's complacent disinterest and inertia," he said.  "The regulator of an industry is like the foundation of a house and the straw men of ASIC have provided a very sandy foundation for the financial planning industry." It might be harsh but until the regulator starts acting tougher and quicker, Morris' attitude will remain a community attitude.

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  • setup
    setup Tuesday, 09 September 2014

    Prime Minister, you do have the power to stand up to Asic and the banks. Prove your worth and stop this horrific suffering.
    Put and end to the corruption. The evidence of banking fraud is overwhelming and deserves a Royal Commission urgently. How much more evidence do you need??

  • organza
    organza Tuesday, 09 September 2014

    Good luck in trying to get an honest answer from our PM who a little birdie has just told me has to now wear a tiny microphone in his ear and given answers to utter under instrutions when being interviewed and asked any curly questions. No wonder he and a few other politicians famous for making gaffes look so very wooden and uncomfortable and all words uttered sound are so very guarded. Question - who behind the scenes is running the country? (hint- rhymes with Tank)!

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