Trio-linked planner ban confirmed
The Administrative Appeals Tribunal (AAT) has affirmed the Australian Securities and Investments Commission's (ASIC's) seven-year ban on a Wollongong financial planner from providing financial services.
In affirming ASIC's decision to ban Mervyn Ross Tarrant, the AAT found the banning order to be appropriate due to the serious and repeated breaches of financial services laws. A consequence of the breaches has been a significant loss in the retirement savings of investors — with evidence of incompetence and negligent, if not wilful, breach.
Tarrant was the sole director and authorised representative of Tarrants Financial Consultants (TFC), a Wollongong financial services firm which invested more than $23 million of its clients' funds in Astarra Strategic Fund (ASF), a managed investment scheme promoted by Trio Capital Limited and Shawn Richard.
On 25 November 2011, ASIC found Tarrant had not complied with various financial services laws and banned him from providing financial services for seven years.
Tarrant subsequently applied to the AAT for a review of ASIC's decision. On 7 December 2011, the AAT ordered ASIC be stayed from issuing any public announcement in relation to the banning order of Tarrant.
On 20 December 2013, the AAT affirmed ASIC's decision to ban Tarrant from providing financial services for seven years and revoked the stay order.
The AAT found the breaches by Tarrant were serious, including making false or misleading statements about remuneration or benefits in statements of advice to clients and failing to have a reasonable basis for the advice he provided to eight clients.
Tarrant had recommended that each of the eight clients borrow a significant amount of money, investing a high proportion of their investments in ASF and the set up of a self-managed superannuation fund to allow superannuation funds to be invested in ASF.
The AAT also found Tarrant failed to disclose in statements of advice the receipt of a marketing allowance from Shawn Richard for investing clients' monies in ASF. From November 2008 to December 2009, an associate of TFC — Tarrants Finance, of which Tarrant was director — received more than $1.1 million in marketing allowances from Richard.
ASIC Deputy Chairman Peter Kell said, "The seriousness of Mr Tarrant's behaviour — which was highlighted by the AAT as being incompetent and negligent — meant that ASIC took all the necessary steps to ensure he was removed from the industry for a substantial period of time."
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