ASIC Ban on Former Spectrum Wealth Director Broadened

The Australian Administrative Appeals Tribunal has broadened a banning decision made by ASIC in 2020 in relation to former Spectrum Wealth director, Mark Schroeder.

The regulator’s original decision in February 2020 (see: Former Spectrum Wealth Chief Banned) was to ban Schroeder from providing financial services for six years; this decision being based on Corporations Act law as it existed at the time.

Following amendments made to the relevant sections of the Corporations Act, however, the AAT has now broadened ASIC’s initial decision in relation to Schroeder to the extent that he is now banned for a period of six years from:

• Providing any financial services and
• Performing any function involved in the carrying on of a financial services business, as well as
• Controlling an entity that carries on a financial services business

In its original findings, ASIC banned Schroeder for what it said was his role in numerous compliance failures by Spectrum Wealth Advisers. It also found Schroeder “…is likely to contravene a financial services law in future because of his involvement and responsibility for Spectrum’s failures and because of his poor understanding of the obligations of providers of financial services, particularly regarding compliance matters.”

In a background statement accompanying this amended ban announcement, the regulator said its banning decision was made before the Corporations Act was amended by the Financial Sector Reform (Hayne Royal Commission Response – Stronger Regulators (2019 Measures)) Act 2020 (Cth) (Stronger Regulators Act).

ASIC noted “A question arose at the outset of these proceedings as to which law should be applied in the course of the Tribunal’s review. While the Tribunal usually applies the law in force at the time of the reviewable decision, the Tribunal concluded in Schroeder and Australian Securities and Investments Commission [2020] AATA 2453 that the transitional provisions inserted by the Stronger Regulators Act had the effect of requiring the Tribunal to apply the law as amended in the course of their review.”