The Administrative Appeals Tribunal (AAT) has set aside a decision by ASIC to ban a former NAB financial adviser, saying it was not an appropriate decision.
In March, ASIC announced it had banned Gerard McCormack of South Melbourne for five years for engaging in misleading and deceptive conduct.
Mr McCormack lodged an application with the tribunal in February seeking a review of ASIC’s decision.
In its judgement, released today, the AAT said while it found that Mr McCormack had breached the Corporations Act, a banning order should not have been made.
“That is because, in the very unusual circumstances of this case, I find that a banning order would not serve to protect the public,” the AAT said.
“Nor would it serve to deter like conduct because of the very remote possibility of the same or similar circumstances arising in the future. It would have no effect in maintaining investor and consumer confidence in financial markets which, on the evidence before me, was not in any event affected by Mr McCormack’s conduct.
“No person suffered any financial detriment and therefore no loss or damages claim could arise. Mr McCormack accepted that his conduct in attempting to recover his client’s money for him was wrongful and an aberration on his part. The only purpose a banning order could serve in these circumstances is to penalise Mr McCormack. That, by itself, is plainly an inappropriate purpose.”
Earlier this year, ASIC said an investigation found that between June 2013 and July 2013, while employed at NAB, Mr McCormack had phoned an industry super fund and falsely represented himself as a member of the fund in order to obtain information about the member.
He also witnessed his client phone and falsely say they were the same member in order to gain further personal account information, ASIC said at the time.
Further, Mr McCormack assisted his client complete and lodge false withdrawal forms, using the information previously obtained, so that all funds were transferred to his client, ASIC said.
Shortly after the announcement, NAB had welcomed ASIC’s decision.
NAB Wealth executive manager Greg Miller said Mr McCormack left NAB in September 2013 after concerns around his conduct were raised.
"Advisers must follow all processes and procedures at all times to make sure they are doing the right thing by our customers, but this wasn't the case for Mr McCormack," Mr Miller said.
"We want to strengthen our business and ensure we are always open, transparent and take issues impacting customers seriously."
Stimulate new ideas. Stimulate new thinking. Top up your CPD points and hear from industry experts with ifa’s Knowledge Centre. Keep up to date with the latest trends and reforms, all while adding to your CPD hours. Explore the Knowledge Centre now.
intelliflo has announced the appointment of its first chief product officer. ...
Lifespan Financial Planning has announced the appointment of an industry veteran. ...
The Federal Court has moved to wind up an unregistered managed investment scheme whose operator blames the corporate regulator for blowing up his inve...