Following investigations, the Australian Securities and Investments Commission (ASIC) has permanently banned a Sydney-based financial adviser and a risk specialist from Newcastle.
Ropati Broederlow, of Punchbowl, New South Wales, was banned from providing financial services after it was found he was unlicensed, acted dishonestly and made false or misleading statements.
Broederlow was the sole director of RN Property Pty Ltd.
An ASIC investigation found that between August 2010 and July 2011 Broederlow advised RN Property’s clients to deposit funds into a trust account looked after by his company.
He told clients that their savings would be used by them to purchase a house, with the assistance of RN Property.
However, when the clients called for their savings, both RN Property and Broederlow failed to use the funds on their clients’ behalf or refund the invested money.
More than 20 clients deposited more than $150,000 into the trust account.
ASIC found that Broederlow “acted dishonestly in the course of carrying on a financial service; made false or misleading statements in relation to a financial product; and carried on a financial services business without holding an Australian financial services licence”.
“The licensing system provides important rights that protect people and their money,” said ASIC commissioner, Peter Kell.
“Anyone giving investment advice or selling financial products without holding a licence may be breaking the law and ASIC will continue to pursue these offenders.”
Broederlow has also been permanently banned from engaging in credit activities, with ASIC also cancelling the credit licence of Yourefund Pty Ltd, of which he was the sole director.
ASIC also expressed the view that Broederlow is not a fit and proper person to engage in credit activities, a decision in line with the regulator’s new powers to investigate and punish misconduct.
Broederlow and Yourefund have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Failure to ensure clients
The regulator has also permanently banned Phillip Paddison, of Mayfield, New South Wales, from providing financial services for engaging in dishonest conduct that involved more than 100 clients and over $150,000.
ASIC found that between October 2010 and November 2011, Paddison, who was the sole director of Risk Transfer Services Pty Ltd, failed to forward clients’ business and personal insurance payments.
These payments, paid to Risk Transfer Services, were meant to be forwarded to its financial services licensee, Insurance Advisernet Australia Pty Ltd (IAA).
In many cases Paddison also failed to ensure clients were adequately insured.
As a result of Paddison’s actions, IAA paid approximately $100,000 to ensure that all affected clients had their insurance cover either reinstated or adequately replaced.
ASIC banned Paddison after finding that he had not complied with financial services laws and that there was reason to believe he would not comply with financial services law in the future.
ASIC commissioner Greg Tanzer said: “We want to make sure that people providing financial services act with integrity and honesty, and, if they don’t, we will take action to make sure they are removed from the industry.”
The regulator commenced its investigation upon receiving a breach notification from IAA.
Paddison has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
