The Australian Securities and Investments Commission (ASIC) has reported an increase in both the number of licensees banned and the number of investigations into alleged misconduct over the past twelve months.
ASIC banned a total of 64 licensees last financial year, up 56% on the previous period.
The regulator also investigated more than 15,000 alleged reports of misconduct in the financial year ending 30 June 2011. ASIC says this represents a 17% increase, with just under one-third of those reports being escalated for investigation or surveillance.
Publishing the statistics in its 2010-11 Annual Report, ASIC said the major types of conduct which prompted bans were:
- Instances of authorised representatives dishonestly taking advantage of their client relationships by conduct such as unauthorised discretionary trading, falsification of trading results, falsification of documents and misappropriation of client funds
- Licensed financial advisers failing to take their clients’ personal circumstances into account in recommending products, failing to have a reasonable basis for the financial advice, failing to provide statements of advice, and inducing clients to invest on the basis of misleading representation
- A failure to maintain membership of external dispute resolution schemes
- Engaging in credit activities while being neither registered with nor licensed by ASIC under its new credit licensing regime
In more positive news, ASIC also reported an increase in the number of new companies, with registrations up 3.6% (over 163,000).
The report was tabled in Parliament on 27 October.
