Fong Financial Planners has been convicted and sentenced in the District Court of Western Australia for three counts of dishonest conduct while carrying on a financial services business, ASIC says.
The firm was sentenced to a fine of $100,000.
The regulator says in a statement that “…between 24 September 2014 and 18 December 2014, Fong Financial Planners, an authorised representative of AMP, acted dishonestly by recording information it knew to be false on forms submitted to AMP as part of client insurance applications.”
ASIC says the company “…intentionally failed to disclose all relevant information relating to the personal circumstances of the clients, including details of their health and medical history. The incomplete disclosure of the information by Fong Financial Planners meant the duty of disclosure owed by the clients to the insurer had not been met and they risked not being covered by AMP policies.”
The commission says that in sentencing, Judge Zempilas noted that “…there was a degree of persistence in the conduct, which had occurred over a three-month period, and that the offending involved repeated breaches of trust in relation to separate clients who had relied on Fong Financial Planners.”
…members of the public necessarily place their faith and trust in financial advisors and services and any breach of trust in those circumstances is therefore serious…
It says Judge Zempilas stated that “…members of the public necessarily place their faith and trust in financial advisors and services and any breach of trust in those circumstances is therefore serious.”
“Judge Zempilas also considered the significant and unjustifiable risks to the clients had they been required to make a claim under their insurance policies, and the particular relevance of general deterrence for offences of this nature,” ASIC says.
It adds that “…mitigating factors, including Fong Financial Planners’ early guilty pleas, other financial consequences to the company as a result of the conduct, and the low risk of reoffending given ASIC banning orders in place against its sole director, were also taken into account by Judge Zempilas when handing down the sentence.”
ASIC says Fong Financial Planners had previously pleaded guilty to the three charges in March 2023.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions after a referral from ASIC.
As background, ASIC says that in 2017, it permanently banned David Fong from providing financial services or engaging in credit activities. Fong appealed ASIC’s decision to the Administrative Appeals Tribunal and the appeal process was stayed pending the outcome of the criminal proceedings, before being withdrawn on 4 September 2023 (see: ASIC Charges Former WA Adviser).
So here’s the question: where the hell were AMPs much vaunted and hated compliance officers?
And on the reasonable assumption that there were lots of risk business being written, were any questions being asked by the appropriate BDM/sales managers?
Let’s put those people out of the industry as well as Mr Fong
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