ASIC’s 2022 efforts against adviser misconduct

By most accounts, it was a big year for Australia’s corporate regulator, which handed out a fair few permanent bans and addressed other financial services misconduct through the course of 2022.

There were over 10 occasions in which advisers came under scrutiny from the Australian Securities & Investments Commission (ASIC). 

At the start of the year, ASIC ordered RI Advice to pay $6 million for the actions of its authorised representative and former adviser, John Doyle, who did not act in his client’ best interests. It was found that he inappropriately advised clients to invest, and stay invested, in complex structured financial products. 

In April, Melbourne-based Mark Christopher Babbage was banned for 10 years from providing financial services or engaging in credit activities after he breached COVID-19 travel laws and falsifying documents to attend the AFL grand final in Perth. He was convicted of the charges relating to a failure to comply with a direction under the Emergency Management Act 2005 and one charge of gaining a benefit by fraud.

Lawrence Toledo, a former Queensland adviser, was convicted and fined $1,500 after pleading guilty to three charges of breaching an ASIC banning order. He had been previously banned for seven years after ASIC found he had failed to act in the best interests of his clients when advising them to establish a self-managed superannuation fund (SMSF) to purchase properties. 

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Walter Yaolong Guan received a five-year ban from providing any financial services or controlling an entity that carries on a financial services business. Although an authorised representative of an AFS licensee, Guan traded shares and managed discretionary accounts for clients although his authorisation did not permit him to do so.

Adelaide-based Tai Thanh Nguyen, who had been permanently banned by ASIC in 2019, was charged in June with seven counts of allegedly falsifying his company books.

In late June, David Noel Ruthenberg, was banned from providing financial services for three years for recommending his clients invest in a high-risk fund which did not match his clients’ risk profiles or experience and in which he had a specific interest.

Former NSW adviser Keith James Flowers, formerly known as Nigel Flowers, received three years and two months imprisonment and a $9,500 fine in July for stealing investor funds as a company director. 

In August, former director Antonio Simeone was banned from providing financial services for five years. Surveillance had found he engaged in misleading or deceptive conduct when he recommended and facilitated the illegal early release of superannuation.

That same month, Ezzat-Daniel Nesseim was also permanently banned from performing any function involved in the operation of a financial services business or controlling, whether alone or with others, an entity that operates a financial services business. 

In September, John Wertheimer of WA, pleaded guilty to one charge of engaging in dishonest conduct and one charge of providing financial services on behalf of a person who carries on a financial services business while unauthorised to do so. 

Totem Wealth Pty Ltd director James Carlos Reynolds was permanently banned in October from providing financial services after ASIC found he “lacked the honesty, integrity, professionalism and sound judgement expected of someone working in the financial services industry”.

In the last month of the year, Ashley Grant Howard was convicted on two charges of using false documents to obtain a financial advantage or cause a financial disadvantage by using false off-market transfer forms to transfer shares in three holdings to himself and an associate without the knowledge or authority of the 14 owners of the shares.

Perth-based Rahul Goel was also sentenced to three years in prison for dishonestly obtaining over $35,000 from his clients’ superannuation accounts. He was found to have submitted falsified access applications to the funds with his and his associates’ contact information and even impersonated clients over the phone in communications with the super funds.