May 8, 2018
ASIC has taken legal action to prevent an adviser, whom it alleges submitted illegitimate life insurance applications to receive commissions, from providing any further advice.
The regulator stated it had commenced proceedings in the Federal Court of Australia against New South Wales financial adviser, Graeme Walter Miller and three related companies: CFS Private Wealth, Combined Financial Solutions and BDM Asia Pacific (formerly known as CFS Corporation).
Following an investigation, ASIC alleged that Miller had submitted illegitimate life insurance applications to insurers in order to receive commissions, in circumstances where the insureds had not instructed him to submit applications on their behalf and were not aware that he had done so.
ASIC also alleged Miller had recommended that clients establish a self-managed superannuation fund and use their SMSF funds to invest in CFS Corporation, of which he was a director; and used investor funds for personal use and to repay other investors in CFS Corporation, and may be continuing to provide financial services and/or raise funds from clients.
The regulator stated it was seeking orders to restrain Miller from providing financial services; prevent any dealings with assets or investor funds; to wind up the companies and appoint a liquidator; and disqualify Miller from managing corporations.
ASIC’s investigation is continuing and the matter will be heard in the Federal Court in Brisbane on 10 May 2018.
In other ASIC-related news, the regulator has cancelled the Australian Financial Services licence of NSW-based risk advice firm Mackellar Financial Services.
The licence, which was held by Mackellar since July 2012, had been suspended in from 31 October 2017 until 30 April 2018 for failing to lodge financial statements and auditor’s reports for a period of four years (see: ASIC Suspends Licence of Risk Firm).
ASIC stated that licensees were required to lodge financial statements and auditor’s reports to demonstrate their capacity to provide financial services and a failure to comply with reporting obligations could be an indicator of a poor compliance culture.