ASIC action ends badly for Christopher John Riotto

australian-securities-and-investments-commission/peter-kell/

9 February 2012
| By Tim Stewart |

Two companies owned and controlled by former NSW President of the Finance Brokers Association of Australia, Christopher John Riotto, have been found to have engaged in "unconscionable and misleading conduct" by the Federal Court.

Sydney-based firms the Australian Lending Centre Pty Ltd and the Sydney Lending Centre Pty Ltd are finance broking companies that brokered business loans for borrowers who were seeking personal loans, according to the Australian Securities and Investments Commission (ASIC).

ASIC brought proceedings on behalf of five clients of the two companies, and in four of the cases the companies knowingly had their clients sign business loans when they wanted personal loans, effectively removing consumer protections provided by the Uniform Consumer Credit Code.

The court also found that the companies represented to lenders that the loans were for business purposes, according to ASIC.

"ASIC's action signals to brokers that attempts to circumvent the legal protections available to consumers will not be tolerated," said ASIC commissioner Peter Kell.

In one of the cases, the court found a loan was secured for a client over his house when the broker knew the client could not afford the repayments - something that has previously been referred to by the court as "asset lending".

Another company also owned and controlled by Riotto, AMR Investments Pty Ltd, was found to have exploited a pensioner with a clearly identifiable disability by having him sign a loan with an interest rate of 5 per cent per month, which was secured over his only asset.

However, in this case the court accepted that the loan was for business purposes.

The "unconscionable and misleading conduct" took place between 2005 and 2008.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 1 week ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks 1 day ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

2 weeks ago

One licensee has lost 27 advisers in the past week, now sitting at zero, according to the latest Wealth Data figures....

3 weeks 1 day ago

TOP PERFORMING FUNDS