ASIC bans rep for ‘kite-flying’
An authorised representative has been permanently banned from providing financial services for the ‘kite-flying’ of cheques.
An investigation by the Australian Securities and Investments Commission (ASIC) found Jane McAllan had simultaneously deposited cheques in her Northern Inland Credit Union Limited (NICU) and Commonwealth Bank of Australia (CBA) accounts.
According to ASIC, using her position as an authorised representative of NICU, McAllan drew funds on her NICU account, avoiding the requirement for the deposited cheques to be cleared before payment could be made.
The regulator said McAllan then withdrew money from both accounts without having sufficient funds to do so.
According to ASIC, McAllan was a signatory to both accounts and it is estimated she deposited over 1,000 cheques. As of March 2006, she is said to have overdrawn her NICU account in the sum of $532,804.52.
ASIC commenced its investigation into McAllan’s conduct after NICU filed a breach notification. She ceased employment with NICU on January 31.
Her conduct was also reported to the New South Wales police.
McAllan has the right to lodge an application for review of ASIC’s decision with the Administrative Appeals Tribunal.
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