28. November 2011 11:13
Volume 27, Issue 4 of Competition and Consumer Law News is now available on LexisNexis Online.
This issue contains the following articles, plus a case note and news update:
- ‘ACCC guidance on manufacturer warranties: A commonsense approach to enforcement lessens the burden of new rules’, by Richard Westmoreland and Dean Hunt of HWL Ebsworth
- ‘ACCC’s year in review and what we can expect in the year to come’, by Tihana Berak of Blake Dawson
- ‘Casenote: ACCC v Metcash Trading Ltd  FCA 967; BC201106415’, by Michael Bradley of Marque Lawyers
- News update: Competition and Consumer News
17. November 2011 15:07
11-258AD Melbourne director banned for five years
Thursday 17 November 2011
A Melbourne director has been disqualified from managing corporations for five years following ASIC’s inquiries into his role in five failed companies that had deficiencies of over $26 million.
Mr Frank Cardamone, of Prahran, was a director of failed companies S.T.A Corporation Pty Limited, Stafford Services Pty Ltd, Burns International Security Services (Australia) Pty Ltd, Greight Pty Ltd and Good 2 Go Admin Pty Ltd.
ASIC found that in relation to Stafford Services Pty Ltd, Mr Cardamone had at various times between 2003 and 2006:
- failed to exercise reasonable care and diligence in exercising his powers and discharging his duties regarding the lodgment of documents with the Australian Taxation Office;
- failed to prevent the company from incurring debts where there were reasonable grounds for suspecting that the company was insolvent;
- failed to respond to the liquidator’s written requests for information about the company’s business, property, affairs and financial circumstances; and
- failed to ensure the maintenance of financial records.
ASIC also found that Mr Cardamone failed to submit a report as to affairs to the receivers of Good 2 Go Admin Pty Ltd in 2008.
Mr Cardamone’s disqualification is consistent with ASIC’s focus on ensuring gatekeepers such as company directors are held to account.
Mr Cardamone has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
17. November 2011 15:00
11-253AD ASIC obtains orders against Australia AFT Finance Market Pty Ltd
Monday 14 November 2011
ASIC has obtained interim orders in the Federal Court in Adelaide against Australia AFT Finance Market Pty Ltd (AFT), a company that operated the website www.aftfx.com.au promoting trading in forex, metals and contracts for difference (CFDs) through the use of the MetaTrader 4 platform.
The orders were obtained because AFT is carrying on an unlicensed financial services business.
The orders obtained restrain AFT from marketing any financial product including MetaTrader 4 and providing any financial product advice.
The court orders have also frozen over $180,000 currently held in a foreign exchange account held by AFT.
ASIC obtained the orders on 4 November 2011.
The matter will return to court on Thursday 8 December 2011.
AFT is incorporated in Australia but ASIC is concerned that its sole director appears to have never been a resident in Australia.
ASIC is also concerned that the content of the website, www.aftfx.com.au , contained false statements including that it was formerly named Adelaide Finance Market Co Ltd and, after merging with a company named Brisbane Financial Securities Co. Ltd, changed its name to AFT Finance Market Holdings Limited. No companies with those names have been incorporated in Australia.
During its investigation, ASIC identified another website, www.nftfx.com, relating to a company called Australia NFT Finance Market Pty Ltd which contains many of the same claims as the AFT website. Australia NFT Finance Market Pty Ltd is not a company incorporated in Australia.
17. November 2011 14:56
11–251AD ASIC proposes new policy for downstream acquisitions
Friday 11 November 2011
ASIC is inviting industry feedback on proposed updates to its policy relating to downstream acquisitions which can occur as a result of an acquisition in another company.
Consultation Paper 170 Downstream acquisitions: update to RG 71 (CP 170) details ASIC’s plans to update guidance on the takeovers exception for downstream acquisitions set out in item 14 of s611 of the Corporations Act 2001. A downstream acquisition occurs when a person acquires a relevant interest in more than 20% of the voting securities in an Australian company (downstream entity) as a result of an acquisition in another company, including a foreign body corporate (upstream entity). Acquisitions of this kind can have a significant impact on the control of the downstream entity and therefore, its shareholders.
ASIC’s policy on downstream acquisitions is currently set out in Regulatory Guide 71 Downstream acquisitions (RG 71). The proposed updates will take into account the significant developments in Australian takeover law since the guide was last updated in 1996. These developments include amendments to the exception for downstream acquisitions in item 14 and an extension of the takeovers regime in Chapter 6 to listed managed investment schemes.
The consultation paper also includes proposed changes to the conditions that may apply when we grant relief for a downstream acquisition that is not exempt under item 14.
Finally, ASIC’s updated guide will provide entities and their advisers with our current views on how the exception in item 14 applies, and our policy on granting relief.
ASIC is seeking comments on the proposed updates to RG 71 by 16 January 2012 and plans to publish a final guide later in 2012.
17. November 2011 14:52
11–250AD ASIC confirms ASX readiness to launch PureMatch
Friday 11 November 2011
ASIC today confirmed it is satisfied that the Australian Securities Exchange (ASX), prospective participants and data vendors are ready for ASX’s new order book, PureMatch, to commence operating from 28 November 2011.
ASX has confirmed its systems and market data connections have been tested and are operationally ready for the commencement of PureMatch, including a re-testing of its systems in the last week. ASX has also provided a third party expert report that confirms this.
ASX has confirmed to ASIC that the circumstances surrounding the ASX Trade outage of 27 October 2011 have been isolated and will not affect the operation of PureMatch.
PureMatch will commence with a soft launch, trading no more than 10 securities for at least two weeks. ASIC will monitor this limited launch and continue to work with ASX and industry participants to ensure a smooth and orderly transition and to maintain fair and efficient markets.
ASIC has given a waiver to participants so they do not need to include PureMatch market data in their consolidated best bid and offer data until 1 March 2012.
PureMatch is an alternative order book that will operate in parallel to ASX TradeMatch, the primary existing ASX order book through which trading in ASX takes place. PureMatch will provide an alternative mechanism for trading of the most liquid cash market products which are traded on ASX’s TradeMatch.
10. November 2011 12:22
11-247AD Former Sydney financial adviser charged with fraud
Wednesday 9 November 2011
A former Sydney-based financial adviser yesterday faced a Sydney court charged with fraud following an ASIC investigation.
James Patrick Hobson, a senior financial adviser, faced Downing Centre Local Court on Tuesday 8 November 2011. It is alleged he defrauded four clients of more than $300,000 and attempted to defraud one of $120,000, over a five month period.
Mr Hobson, employed by Binma Pty Ltd trading as Noall & Co, was charged with four counts of fraudulent misappropriation of a valuable security under Section 178A of The Crimes Act (NSW) and one count of attempting to fraudulently misappropriate a valuable security under Section 178A and section 344A of The Crimes Act (NSW).
It is alleged that between March and August 2008, Mr Hobson misappropriated $307,000 and attempted to misappropriate $120,000 of client funds whilst working for Noall & Co.
In each instance, it is alleged Mr Hobson advised clients to invest in international shares via a product called Skandia. It is alleged that Mr Hobson did not in fact invest these funds on behalf of these clients as per their instructions, but instead used the funds for his own personal use.
The matter will return to court on 10 January 2012.
Mr Hobson was granted conditional bail.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
10. November 2011 12:18
11-245AD Former currency trader pleads guilty
Wednesday 9 November 2011
Krishnan Rasaratnam, a former director of Strategic Alternative Investments Pty Ltd (SAI), has pleaded guilty to six charges relating to dishonest conduct and deception.
Facing Sydney’s Downing Centre District Court, Mr Rasaratnam pleaded guilty to one count of using a false instrument and five counts of dishonest conduct in relation to providing a financial service.
In addition, one charge of using a false instrument, three charges of dishonest conduct and two charges of making false statements to ASIC will be taken into account in the sentencing of Mr Rasaratnam.
SAI was the holder of an Australian financial services (AFS) licence and provided product advice and dealt in derivative and foreign exchange contracts. ASIC cancelled SAI’s licence on 1 December 2006.
Between February 2006 and January 2008, Mr Rasaratnam raised funds from investors by making false and misleading claims that SAI investments were low risk, carried a high return and in some cases were capital guaranteed by a major investment bank.
Mr Rasaratam, who was not licensed as a currency trader, misappropriated the investor funds by diverting those funds to his personal trading account. As a result of the purported investment activity by SAI investors incurred losses of more than $12 million.
Mr Rasaratnam was arrested and charged in September 2009 (refer 09-170AD).
The maximum penalties for the offences are 10 years imprisonment for using a false instrument, five years imprisonment for dishonest conduct in relation to providing a financial service and five years imprisonment for making false and misleading statements to ASIC.
Mr Rasaratnam appeared before the Court on 28 October 2011.
Mr Rasaratnam will be sentenced on 29 March 2012.
The Commonwealth Director of Public Prosecutions is prosecuting the matter.
10. November 2011 12:09
11-244AD ASIC bans authorised representative of Romad Financial Services
Monday 7 November 2011
ASIC has banned Mr Rory Mor Macleod Deutsch, of Box Hill North in Victoria, from providing financial services for four years following his failure to comply with financial services laws.
Mr Deutsch has been an authorised representative of Romad Financial Services Pty Ltd (RFS) and the Responsible Manager and Key Person of RFS’s Australian financial services licence (AFS) licence since June 2004.
An ASIC investigation found that Mr Deutsch had failed to comply with financial services laws between 1 April 2009 and 28 April 2011 and that there may be reason to believe that he would not comply with financial services law in the future.
In particular, ASIC found Mr Deutsch:
- carried on a financial services business by issuing interests in two unregistered managed investment schemes without holding an AFS licence or being authorised under RFS’s AFS licence or any other AFS licensee, to issue interests in managed investment schemes;
- engaged in conduct in relation to a financial product or service that was misleading or deceptive, or was likely to mislead or deceive retail investors, specifically the making of certain representations and the failure to disclose material facts in offer documents and trust deeds relating to the two unregistered managed investment schemes.
The action to remove Mr Deutsch from the industry is part of ASIC’s focus to improve industry standards and protect the investing public from individuals who operate outside the financial services laws.
Mr Deutsch’s banning follows action taken by ASIC to cancel the AFS licence of RFS.
RFS has been granted an order by the Administrative Appeals Tribunal (AAT) to stay the cancellation until determination of a review of ASIC’s decision.
Mr Deutsch has the right to appeal to the AAT for a review of ASIC’s decision.
10. November 2011 10:50
The latest issues of the Competition and Consumer Law News are now available to LexisNexis Online subscribers.
In these issues, you can read the following articles and case notes:
- Toby Boys and Abbey Richards of Holding Redlich Lawyers ask, ‘ACCC v Prysmian Cavi: Is the anonymity of cartel informers under threat?’
- Michael Bradley and Hannah Marshall of Marque Lawyers write up the Federal Court of Australia case of ACCC v Trading Post Australia Pty Ltd & Google Inc  FCA 1086
- Shanker Singham and Nicole Matrai of Squire Sanders discuss Australia’s Palm Oil Labelling Bill
- Trevor Stevens of Davies Collison Cave reports on Tobacco plain packaging reforms and what they mean for Australian trade mark law and our international obligations
- Jon Denovan of Gadens Lawyers outlines the NCCP ACT amendments – hardship, leases, reverse mortgages, and small amount lending
- Neil Kirby of Werksmans sheds light on legislation in South Africa in ‘Clearly clear? Plain and understandable language in terms of the Consumer Protection Act in South Africa’
Also, can you find:
- News update: Competition and Consumer News
4. November 2011 14:35
Issue 14 of the Risk Management Today newsletter is now available to LexisNexis Online subscribers.
It features the following articles:
- ‘Demystifying risk’ by Bill Dee of Compliance and Complaints Advisory Services
- ‘ERM = GBM (good business management)’, by Melinda Howes of Actuaries Institute
- ‘Time for new methods in risk communication’, by Harry Rosenthal of Regis and Partners, Managers of Unimutual
- ‘Compliance risk management in India’, by John McFarland of Hill & Associates Risk Consulting Group
- ‘Risk management: perfectly complex or a path to perfection? – Part 2’, by Ian Abrahams of Corprofit Systems