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This week in penalties…

October 25, 2019

 

 

Australian Securities and Investments Commission (ASIC)

 

 

Sentenced 

Former financial adviser the Ben Jayaweera from Queensland was sentenced to 12 years in prison for dishonestly causing detriment to his clients of about $ 5.9 million. 

According to a statement from ASIC, Jayaweera induced some of his clients to move their funds form a self-managed superfund to an unregistered managed investment scheme and, in some cases, he moved the funds without the clients’ knowledge. 

 

Reinstatement of penalties 

Prime trust directors have had penalties re-imposed on them specifically against William Lewski, Mark Butler, Kim Jacques, and Michael Wooldridge who ASIC said were all former directors of Australian Property Custodian Holdings (APCHL). 

 

The original penalties in 2014 were connected to a contravention of the Corporations Act where the directors ‘voting to lodge an invalidly amended scheme constitution and subsequently voting for payment of fees out of trust funds.’

 

“Except in the case of Dr. Wooldridge, ASIC and the former directors made joint submissions to the Court that the effective reimposition of the original penalties would address the need for deterrence in respect of the misconduct, and that it was in the public interest for the proceedings to be finalised as quickly as possible,” ASIC said in an statement. 

 

Licence Suspended 

KP Financial has had its financial license suspended because it did not adequately address ‘systemic’ issues found the then Financial Ombudsman Service (FOS). 

 

" As a result, ASIC determined that KP International had failed to do all things necessary to ensure that the financial services covered by its license were provided efficiently, honestly and fairly. ASIC also found KP International’s professional indemnity insurance cover had exclusions that made it inadequate for the licensee’s business and any liabilities arising from potential compensation claims.” ASIC said in an official statement.

 

 

Australian Competition and Consumer Commission 

 

Penalties

Flight Centre the Travel Group has $252, 000 in penalties after two infringement notices form the competition regulator about the misleading advertising promoting holiday vouchers for the 2018 Christmas and Easter 2019. 

 

“We are concerned that consumers were enticed to purchase their holiday through Flight Centre to obtain a voucher they were not able to use without spending another $5000 when this was not adequately disclosed,” ACCC Commissioner Sarah Court in a statement this week. 

Since then the flight centre has waived the $5000-minimum spend and extended the redemption period until 31 December 2019.

 

Refund for the unfair contract terms 

Ashley & Martin will have refund consumers due to unfair contract terms for their ‘PersonalREALGROWTH Program’ between the period of June 2014 and June 2017 before receiving medical advice. 

 

“The ACCC is continuing to take action against businesses that include and use unfair contract terms in their standard form contract with consumers and small business,” ACCC commissioner Sarah Court said in an official statement. 

 

 

 

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