The former directors of Sydney-based funds management business One Investment Services have entered an enforceable undertaking for being “materially misleading” in their application for an AFSL, according to ASIC.
In a statement, the regulator said directors Justin Epstein and Frank Tearle applied for an AFSL for One Investment Services (OIS) in March 2015, then entered an agreement to sell the business in August of that same year.
According to the ASIC adviser register, Mr Tearle has been a registered adviser for One Managed Investment Funds since 13 June 2012.
Neither Mr Tearle nor Mr Epstein informed ASIC of the proposed sale, and the AFSL was granted on 16 of September 2015, before OIS was sold to a third party on 24 September and changed its name to IMS FX Services.
ASIC then cancelled the AFSL in February 2016 “on the grounds that the licence application lodged by OIS had been materially misleading”.
The regulator said Mr Tearle and Mr Epstein “may have contravened their directors' duties under section 180 of the Corporations Act” as they failed to inform the regulator of the proposed sale, may have permitted “potentially misleading” information to be submitted, and may have known information relating to the potential sale was material to the application.
Under the enforceable undertaking, neither Mr Tearle nor Mr Epstein will be able to act as responsible managers of a financial services business for six to 12 months, will remove themselves from the AFSL application process for two years, and complete 30 hours of training.
The pair will be required to notify ASIC if a business which they are directors of undergoes a change of ownership, as well as ensure those businesses submit to additional compliance measures for the next two years.
Further, both have agreed to make a “voluntary contribution of $100,000” each to the Ethics Centre.
The prudential regulator has released its latest corporate plan.
The bid was originally put forward in June.
ASIC has issued a permanent ban to the former financial adviser.
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