19 criminal and 43 civil cases are currently before the Courts with ASIC taking enforcement action for breaches of financial services law including for unlicensed conduct, dishonest conduct and misleading statements.
ASIC’s enforcement activity is detailed in ASIC Report 476: ASIC enforcement outcomes: July to December 2015 which provides useful intelligence on current and future areas of enforcement. Pursuing breaches of financial services law has been a particularly active area for ASIC in the 6 month period between 1 July 2015 – 31 December 2015, with ASIC achieving results in 3 criminal and 12 civil cases, imposing 67 administrative remedies and obtaining 4 enforceable undertakings.
The report’s statistics are partly covered by ASIC’s 2015/2016 to 2018/2019 Corporate Plan, on which we have previously reported, which signalled a renewed focus on financial services providers including investment banks, issuers, brokers, lenders, financial market participants, responsible entities, company directors, auditors and insolvency practitioners.
ASIC has reaffirmed the areas of enforcement priority identified in its Corporate Plan and reiterated a special focus on financial services providers in relation to:
the quality financial advice, especially advice affecting retirement savings and the selling of inappropriate financial products and services;
the remediation of clients who have suffered loss as a result of poor advice;
complex products, services and distribution models caused by financial innovation;
the culture within financial services providers and risks arising from poor gatekeeper culture and conduct;
inadequate disclosure by companies and issuers of cyber threats; and
corporate governance matters including issues concerning related party transactions, inadequate company disclosure and financial reporting and accounting fraud.
These latest developments highlight the importance of ensuring you hold appropriate the licences for your financial services business, that marketing materials are accurate and not misleading, and that your financial advisers and other representatives know their responsibilities and legal obligations when dealing with clients.