The Australian financial watchdog has been cracking down on the miscreants of the wealth management sector, and it has continued its stance on cleaning up the sector.

The Australian Securities and Investments Commission (ASIC) has continued its crackdown on the wealth management industry in the region with a number of sanctions.

For several years, the regulator has sought to clean up the Australian wealth management industry, purging miscreant advisors and other practitioners from the sector.

Mackellar
Firstly, ASIC has cancelled the Australian Financial Services (AFS) licence of New South Wales-based Mackellar Financial Services.

Mackellar's AFS licence has been cancelled, following a suspension in October 2017, for continued failure to lodge financial statements and auditor's reports for a period of four years.

Licensees are required to lodge financial statements and auditor's reports with ASIC to demonstrate their capacity to provide financial services. 

Mackellar held its AFS licence since July 2012.

Director elections
Following an ASIC investigation, Neil Evans, a financial planner, has been charged over fraudulent voting in the director elections for Victoria-based WAW Credit Union Co-Operative, a financial services firm.

ASIC alleges that Evans misused the personal details of approximately 499 WAW members to gain access to the online voting portal and cast ballots in the election for two candidates without the authorisation of those members. It also alleges that Evans sourced those details from a list of WAW customers that he had obtained for the purposes of marketing his financial planning services.

The watchdog also alleges that the consequences of Evans’ voting allowed one person to be improperly elected to the WAW board, and another person who should have been elected was not.

Evans has been charged with one count of causing unauthorised modification to data held in a computer contrary to section 247C of the Victorian Crimes Act, which carries a maximum penalty of 10 years imprisonment.

ASIC does not allege that anyone else was involved in Evans’ unauthorised voting. The matter has been listed for a plea hearing before the Melbourne Magistrates’ Court on 5 July. It is being prosecuted by the Commonwealth Director of Public Prosecutions.

Permanent ban
ASIC has permanently banned Queensland financial advisor Michael Gordon McIlwraith Taylor from providing financial services. 

Taylor was an authorised representative of Morgans Financial from 10 March 2004 until 21 September 2015. 

Between 2007 and 2015, Taylor borrowed approximately AU$1.2 million ($904,000) from 16 clients. Borrowing from clients is a conflict of interest for financial advisors. 

In the period, Taylor provided financial services; he used the money borrowed from clients to fund his own investments. He borrowed these funds from clients at a time when they had not obtained independent professional advice.Taylor also entered into an options trade on their behalf.

ASIC determined that Taylor was “not competent, inadequately trained and not of good fame and character”.

Taylor’s banning will be recorded on ASIC’s Banned and Disqualified Persons Register and Financial Advisers Register. Taylor has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.