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This week in penalties…

Broker Banned

Former insurance broker James Sheehan will be added to the conduct regulator’s Banned and Disqualified Persons Register for engaging in dishonest conduct.

The Australian Securities and Investments Commission (ASIC) has also permanently banned the broker from engaging in credit activities.

Sheehan instructed his clients to pay insurance premiums into accounts controlled by him and ultimately misappropriated $300,000.

ASIC added that, after receiving their premiums, he cancelled client invoices, leaving them uninsured and placing both the client and potential third parties at significant risk.

ASIC has banned a director from providing financial advice for 5 years

In addition, for failing to comply with financial services laws on many occasions, ASIC has banned Matthew McCrow for his part in Jade Capital’s false advertising with regards to misleading returns, fees and performance history.

According to ASIC:

Mr McCrow had failed to act in the best interests of his clients or prioritise their interests. Instead, he had recommended MDA strategies without adequately considering his clients’ goals, circumstances and financial situation or the suitability of the strategies he was recommending. ASIC also found that fees and cost disclosures in advice documents provided by Mr McCrow to clients were misleading.

Broker banned for three years

Director of Foster Stockbroking Mark Hinsley has been banned from the industry for three years for conduct around the initial public offering of shares for Reffind Ltd.

The Australian Securities and Investments Commission (ASIC) said that in their investigation they found:

  • Mr Hinsley engaged in misleading or deceptive conduct contrary to s1041H(1) of the Corporations Act by failing to disclose to RFN that a proportion of their shares in the RFN IPO had been allocated to nominee accounts controlled by Hinsley and his fellow FSB directors;

  • the RFN Research Report, authored by Mr Hinsley, contained assumptions and statements that had no reasonable grounds and as a result was misleading contrary to s1041H(1) of the Corporations Act; and

  • Mr Hinsley was involved in FSB contravening its general obligations as a financial services licensee to act fairly and to have adequate arrangements to manage conflicts of interest in authoring the RFN research report.

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