Broker banned for reckless advice
By Rebecca Evans
THE Australian Securities and Investments Commission (ASIC) has banned a former Melbourne financial adviser from acting as a financial services representative for four years, after receiving a referral from the Australian StockExchange.
Darren Andrew Hunt has been found to have contravened the Corporations Act as a dealer’s representative after making securities recommendations to a client without reasonable basis.
Hunt was employed as a dealer’s representative of two stockbroking firms, Mortimer and Chua, between April 1, 2001, and April 5, 2002, and Terrain Securities, between April 8, 2002, and May 31, 2003.
ASIC’s investigation found that Hunt recommended a 63-year-old client invest the majority of her savings of approximately $600,000 in the share market.
ASIC found Hunt had misled his client about the true state of her share portfolio, about his management of it, and that he traded outside the terms agreed to with his client.
This included recommending the use of a margin lending facility without regard to her risk profile and investment objectives, and recommending options trading to her when he was not accredited to do so.
In handing down its decision, ASIC says Hunt’s client suffered a net loss of approximately $335,939 that was largely attributable to his mismanagement of her portfolio.
“ASIC will remove financial services advisers who do not comply with their obligations and responsibilities so as to protect the investors,” ASIC’s deputy executive director of enforcement Mark Steward says.
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