ASIC bans director linked to previously banned adviser

The corporate regulator has permanently banned a Sydney-based director from providing any financial services, performing any function involved in the carrying on of a financial services business, and controlling an entity that carries on a financial services business.

David Henty Sutton has been banned by the Australian Securities and Investments Commission (ASIC) due to his conduct, which involved making offers of investment in unlisted shares via McFaddens Securities to both Australian and overseas investors in companies such as Steppes Alternative Asset Management, Trinus Impact Capital, Avalon Pacific Group Limited (APG), and ASAF Critical Metals and its Australian subsidiary, Aus Streaming Limited.

The corporate regulator also said it has cancelled the Australian financial services licence of Mr Sutton’s company, McFaddens, now known by its previous name, APC Securities, while Mr Sutton has been disqualified from managing corporations for five years.

ASIC determined that Mr Sutton is not a fit and proper person to provide financial services due to his conduct when he:

• induced another person/s to deal in financial products by making a statement that is misleading, false or deceptive or by a dishonest concealment of material facts;
• made false, misleading or deceptive representations in his capacity as a director of McFaddens and APG to potential investors;
• engaged in conduct regarding a financial product that was misleading and deceptive or was likely to mislead and deceive;
• did not take reasonable steps to ensure McFaddens’ representatives did not accept conflicted remuneration; and
• was involved in and facilitated misconduct by Kristofer Ridgway — a former financial adviser recently permanently banned by ASIC.

ASIC also found that Mr Sutton failed to exercise his power and discharge his duty with care and diligence in relation to his directorships of Paltar Petroleum Limited and Aus Streaming Limited.

McFaddens and Mr Sutton have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

Last month, the corporate regulator confirmed it had obtained travel restraint orders against Kristofer Ridgway, a Brisbane-based former financial adviser.

The regulator explained at the time that it is concerned Mr Ridgway may have contravened financial services laws and required him to remain in Australia while it investigates his conduct.

In April this year, ASIC permanently banned Mr Ridgway from having any involvement in financial services.

In a statement at the time, the regulator said it had determined a permanent ban was necessary due to concerns Mr Ridgway is not a fit and proper person to provide financial services, is not adequately trained or competent to provide financial services and is likely to contravene financial services law.