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This Week in Penalties…


From Australian Securities and Investments Commission (ASIC) this week, we have seen an appeal against the Federal Court ruling against a major bank, as well as the suspension and conviction of a director over market manipulation.

Court action over phone sales

Earlier this week, ASIC announced they commenced proceedings against Select AFSL, Blue Inc Services and Insurance Marketing Services for breaches of the laws relating to telephone sales of life and accidental injury insurance. The breaches took place between February 2015 and March 2018 and impacted 14 customers.

The specific breaches of the Australian Securities and Investment Commission Act 2001 upon which the regulator is focussing are listed in the official statement as:

  • unconscionable conduct when selling insurance and/or taking payment details over the phone, and when consumers attempted to cancel their insurance policies;

  • undue harassment;

  • coercion; and/or

  • making false and/or misleading representations.

Market manipulation

The regulator announced this week that former Director of Hudson Resources Ltd and Raffles Capital Ltd, Benjamin Amzalak, was convicted in the District Court of New South Wales for market manipulation and sentenced to two years’ imprisonment with 300 hours of community service.

Between the period of 12 June 2013 and 2 August 2013, ASIC said the former director took part in transactions that ‘had the likely effect’ of creating artificial prices for Precious Metal Resources on the ASX.

Uncertainty in responsible lending

Not exactly a penalty, but the conduct regulator is appealing the 13 August judgement by the Federal Court that big four member Westpac did not breach the National Consumer Credit Protection Act 2009 when it comes to responsible lending.

“ASIC considers that the Federal Court’s decision creates uncertainty as to what is required for a lender to comply with its assessment obligation, nor does ASIC regard the decision as consistent with the legislative intention of the responsible lending regime. For those reasons, ASIC will appeal to the Full Court of the Federal Court,” said ASIC Commissioner Sean Hughes, earlier this week.

License suspended

The regulator suspended the licence of Queensland-based financial services provider, Financial Options Pty Ltd, for its failure to meet its obligations as a licensee.

The regulator alleged that Financial Options failed to:

  • Lodge accounts and audit report for 30 June 2018;

  • Failed to have a dispute resolution policy in place; and

  • Did not maintain organisational competence and resources as required under the licence.


Infringement notice issued

Earlier this year, the financial intelligence unit delivered an infringement notice of $252,000 to Compass Global Holdings for failing to report international funds transfers (IFTIs) between 2018 and 2019.

Australian Transactions Reports and Analysis Centre (AUSTRAC) indicated that they are working with the company to improve the systems and processes to ‘identify, mitigate and manage money laundering and terrorism financing risk’.

In an official statement, the regulator said, “Money transfer businesses are a major part of Australia’s financial system, with individuals and businesses reporting $60 billion worth of international funds transfer instructions sent and received by people in Australia using registered money transfer services in 2018/19.”


CEU for ACL Breach

The ACCC accepted the court-enforceable undertaking from telecommunications company BVivid after the company admitted to breaches of Australian Consumer Law (ACL) by making telemarketing calls to areas transitioning to the NBN between October 2017 and May 2018.

“BVivid’s calls likely misled consumers and gave them a false sense of urgency and need,” ACCC Commissioner Sarah Court said, in an official statement earlier this week.

ACCC indicated the telco provider also paid more than $25,000 in penalties, after it was issued with two infringement notices.


The Australian Skills Quality Authority (ASQA) released an update on their regulatory decisions pertaining to the cancellation of registrations, rejections of applications, and suspensions of registrations for Vocational Education and Training (VET).

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