Banned Melbourne adviser sees order varied with jail threat
An alleged involvement with an insurance claims business has led the Federal Court to vary the orders of a former adviser who had been banned from working in financial services.
In September 2016, the Federal Court in Melbourne ordered Bradley Grimm and his wife Vanessa Ash to be restrained from providing financial services for 20 and 10 years respectively, and disqualified from managing corporations for 15 and seven years respectively. Their company Ostrava Equities and eight other companies associated with it were also wound up.
The court found Grimm engaged in dishonest conduct by charging unauthorised fees to clients as well as contravened the Corporations Act by making misleading statements to clients about the value of their SMSFs, providing unlicensed managed discretionary account services, failing to comply with financial services disclosure obligations, and failing to act in clients’ best interests.
The court also found that both Grimm and Ash had breached their duties as company directors.
However, an “oversight” at the time meant a penal order was excluded.
Subsequently, in 2023, ASIC announced it was investigating the alleged involvement by Grimm and Ash in a “third party claims” company called TP Claims in Melbourne.
Copy on the TP Claims website in March 2023, provided to the court, stated: “Third Party Claims is a no-win no-fee third party recoveries company – if you have a good case, we’ll go into battle for you. We can help you prepare documentation for an Ombudsman dispute, to put your best foot forward for the best result possible in your favour. We can provide advice on escalating your case if necessary.”
This alleged work regarding advising or assisting clients with claims against their insurer, ASIC said, may constitute providing financial advice and be in breach of Grimm’s orders or place him at risk of breaching them.
Grimm stated that TP Claims is a vehicle accident management business and does not act for clients involved in disputes.
As a result of its concerns, ASIC applied to the Federal Court in February 2024 for a penal order to be added. This would mean the two individuals “be liable to imprisonment, sequestration of property or other punishment” if they breach the order.
The two individuals “may be said to currently enjoy a possible benefit from the absence of the endorsement in that they may be less readily exposed to prosecution for contempt if they fail to comply,” ASIC argued.
On 12 September 2024, Justice Lisa Hespe noted the “extraordinarily long” period of seven years between the two orders, but granted ASIC’s request as the compliance time of their bans had not yet expired.
“Given the time for compliance with the orders has not expired, it is desirable that, going forward, there should be as little doubt as possible that proceedings for contempt could be prosecuted.
“I am satisfied that varying and reissuing the orders will bring more clarity to the potential consequences of non-compliance with those orders and may assist in their enforcement through contempt proceedings.”
AUTHOR
Laura Dew
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