ASIC launches major best interests action against Dixon Advisory
Dixon Advisory has become the subject of Federal Court proceedings launched by the Australian Securities and Investments Commission (ASIC) over alleged failure to act in their clients’ best interests.
The regulator announced the proceedings today saying it was alleging Dixon Advisory representatives failed to act in their clients’ best interests and to provide advice that was appropriate to the clients’ circumstances.
ASIC said it was also alleging that, in giving the relevant advice, Dixon Advisory representatives knew or ought to have known that there was a conflict between their clients’ interests and the interests of entities associated with Dixon Advisory within the Evans Dixon group, and failed to give priority to the clients’ interests.
The regulator said the court action related to financial advice given to eight sample clients, who were advised to invest in the US Masters Residential Property Fund (URF) and URF-related products between 2 September 2015 and 31 May 2019.
It said it would be further alleging that a total of 51 separate instances of financial advice were provided to the eight sample clients in the relevant period, each of which resulted in two or more contraventions of ‘best interests duties’ under the Corporations Act.
ASIC is seeking declarations of contraventions and pecuniary penalties against Dixon Advisory. The maximum civil penalty for contraventions alleged against Dixon Advisory is $1 million per contravention for contraventions prior to 13 March 2019, and $10.5 million per contravention after that date.
ASIC is also seeking orders that Dixon Advisory:
a) put in place appropriate systems, policies and procedures to ensure that Dixon Advisory representatives comply with best interests’ obligations; and
b) provide a written report from an independent expert confirming this compliance.
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