ASIC banning for illegal advice
TheAustralian Securities and Investments Commission(ASIC) has banned a South Australian man from acting as an investment adviser or as a representative of a securities dealer for two years after illegally offering advice to clients.
ASIC found that Kevin Lehman of Semaphore Park, South Australia, breached the law by acting as if he were a representative of AMP when in fact he did not hold a proper authority from the company.
This involved Lehman advising on and deliberately offering AMP superannuation and insurance products despite awareness he was not authorised to do so.
Lehman also failed to disclose certain commissions and fees to clients, and recommended investments without giving sufficient consideration to their best interests.
Lehman conducted his financial advice business with his son, Klinton Lehman, who was an AMP property authority holder between February 2001 and April 2002.
AMP has since terminated Klinton Lehman’s authorisation and last month he was subsequently banned for four years by ASIC for conducting business alongside an unauthorised third party, in this case, his father.
The regulator has also announced that following its own application, McLaughlins Financial Services has been appointed as the temporary responsible entity for 15 managed investment schemes worth approximately $37 million.
Formerly controlled by Entitle, ASIC sought the appointment when it revoked Entitle’s licence after revelations the dealer had not performed its duties efficiently, honestly and fairly.
The regulator found Entitle failed to maintain the requisite value of $50,000 in net tangible assets required as a condition of its dealers’ licence, neglected to lodge audited financial statements for 2001 and 2002 and for a year had only two registered directors when three are required for a public company.
Entitle managed the investment schemes on behalf of over 300 investors, and McLaughlins will now call meetings of the scheme members to appoint a new responsible entity.
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