According to his submission to FOS, Greg Wenmoth and his wife lost a large portion of their nest egg after they invested into a dodgy venture ran by Protect Ensure – a now-defunct Sydney advice firm that had allegedly been on ASIC’s radar since 2012 following reported concerns.
Mr Wenmoth said he and his wife had been offered a return of 6.2 per cent per annum for making the investment. What he did not know, however, was that the firm’s director, Lee Robin, had been using the money to pay other noteholders and fund personal expenses.
ASIC eventually cancelled Protect Ensure’s licence in December 2014, but only for not having adequate financial resources, a media release states. Mr Lee’s misconduct was not mentioned until December 2015, when ASIC announced his permanent ban from the industry.
However, by then it was too late. The business had been sold several months earlier in May 2015 for only $210,000 and a “friendly” liquidator was appointed. Most clients would never see their money again.
Mr Wenmoth blames ASIC for not taking action sooner.
“We believe there are a lot of things that were not investigated correctly and that were simply just swept under the carpet,” he said.
“It is unclear what measures, if any, were taken by the regulator to protect the public in relation to the sale of Protect Ensure’s assets. Why was a ‘friendly’ company allowed to be appointed as a liquidator and why did ASIC not seek a court-appointed liquidator to ensure the matters were dealt with correctly and fairly?
“I do not believe that this would have ever happened had ASIC shut Mr Lee Robin down when it was first discovered that he was behaving in a dishonest manner.”
This story is part of a widespread investigative feature on ASIC enforcement activity to be published in the March edition of ifa magazine.
How come Mr Wenmonth lost the lot as the venture was merely run by protect ensure?
Can we stop this from happening again
ASIC, FOS create problems for our industry by going after low hanging fruit – US AS ADVISERS, meanwhile Timbercorp, Bridgecorp, Fincorp, Great Southern, Alco Finance, Prime Property Trust, Banksia Group Westpoint etc investors lose BILLIONS.
But I recall that when ASIC was called the National Companies and Securitiies Commission (NCSC) back in the 80’s and 90’s , we also had Estate Mortgage, Armstrong Jones, Growth Equities Property Trust, Austwide Property Trust, Bell Resources, etc as well collapse costing investors Billions. Very little has changed.
Incompetent cop on the beat presiding over crap coming out with BS attacking us as advisers when those who commit fraud, deception, theft with a pen and paper in the form of a contract are condoned for their actions via politicians who care about the big banks, the ISN and large insurers and their profits and not about our clients, advisers and their businesses and the voter. This is yet another instance of incompetence. The FPA/AFA ought hang their collective heads in shame for going along with the rabble we have as politicians and selling us as advisers and our clients out.
Most of the major failures of product or advice had been signed off by ASIC prior to their failure. Storm Financial were reviewed by ASIC and got a tick because they were “fee for advice” and didnt take any of those “nasty” commissions. Never mind that they had double & triple gearing strategies in place. It just shows the blinkered view of the zealots who have joined ASIC from industry super funds and the biases they have. The fact that ASIC have engaged a legal team to consider whether percentage based advice fees are conflicted remuneration continue to show that they are only interested in playing the man and not the ball.
Why doesn’t the FPA take on this case for the Wenmoths using some of their ‘best in the financial sector’ lawyers, and when they win and hold ASIC to account they will do more to strengthen the industry and show integrity than all the public relations dollars they could ever spend.
Once ASIC is held responsible for it’s snail’s pace action against ‘dodgy advisors’ the system will change. Maybe at first notification that client’s money is being ‘lost’ ASIC has to require the advisor/advice firm to take out insurance to cover new client money during the period of investigation. This could be a new product for insurers – and surely if an insurance company decides a particular firm is not worth the risk, then poor Joe Public should never be left so unprotected from risk by the regulator ASIC.
Lee Robin, had been using the money to pay other note holders and fund personal expenses……you do not need a phd in astro financial planning to know you are not allowed to take money from someones account to fund personal expenses.THIS IS NOT ROCKET SCIENCE
What amazes me most is that ASIC will make a small licensee or ACL with two advisers/brokers jump thru hoops and run audits on them and ask for countless reams of paper work and spend 12 months doing this only to find nothing on them but they’ll do very little to deal with the elephant in the room such as this story. One of our staff members is ex-ASIC and she said the reason she left ASIC is because they used to spend more time bullying small operators around, issuing “infringement” notices to ASX listed companies and try to change laws to suit them (instead of enforcing laws which is their job) versus dealing with much bigger problems that are given to them on a silver platter by victims or whistleblowers. You should hang your head in shame ASIC!
now the truth is coming out.Exactly why we need a royal commission into CBA ,FOS and the ASIC
True, though be careful what you wish for – if history is a guide, even if they did so the only thing that would change would be even more inane regulation and copious additional paperwork thrust upon us planners.
ISA has Labor in their pocket, FSC has Lib’s in theirs… and our industry has no one that truly represents planners or the planning profession anymore, so no surprise we became the scapegoat.
Come on, when does ASIC wake up for anyone? This sleeping sloth full of pen pushing clueless public servants are so out of touch it’s hilarious.
ANYWAY, we all know the answer is education and FPA/AFA membership.
None of this would have ever happened if the guy had a degree, paid his membership fees and did his courses.
Oh wait, he was and did! Move along nothing to see here……education is everything let’s all do some more courses.
Opt in, FDS, 2000 page SoA’s, having a PHD in Applied Astro Financial Planning and an annual adviser exam will all prevent these fraudulent cases in the future. We can all thankfully sleep well at night, and put these events of 2012 well behind us, knowing they will never ever occur again.
Well yes the regulation by ASIC is a Charade. Most regulation is not enforced and the smart alec’s know this. It is no use legislating for crooks not to be crooks, they are crooks so they do not give a %%%%. When will we learn that making honest people do lots of paperwork does not protect anyone from crooks.
Exactly Patrick. What is going in with ASIC? They are obsessed with the way we write our Statements of Advice and file notes, the way we charge fees, and whether or not we should call ourselves independent owned. But the public are not interested in this crap. They only care about one thing. They want a regulator that prevents someone from stealing their money. Pretty bloody simple mandate. If they focussed their attention on this they might actually achieve something positive. The way we are going, all the honest advisers will be gone in the next 5 years and the average punter will have no choice but deal directly with product providers. Many of whom will rape them blind.
well well well,
here we go more of the same thing. ASIC also allowed the CBA to close Whittaker Mcnaught License yet the ASIC knew of an adviser misconduct and knew there were clients fighting for compensation how ever the ASIC allowed that license to be closed without finalizing any liability claims. So Mr Turnbull if you are not going to have a royal commission are you going to pay the claims in which your agency [The ASIC ] failed to investigate and failed to have those licenses kept open until all liabilities are dealt with.
The Australian public would like to know what is the definition of an “Advice Client”? Is it another confusing label to cover up what is really going on with dodgy investments?