Following a guilty plea earlier this year, Fong Financial Planners has been convicted and sentenced for three counts of dishonest conduct while carrying on a financial services business.
Fong Financial Planners has been sentenced to a fine of $100,000 by the District Court of Western Australia.
Between 24 September 2014 and 18 December 2014, Fong Financial Planners, an authorised representative of AMP, acted dishonestly by recording information it knew to be false on forms submitted to AMP as part of client insurance applications.
“Fong Financial Planners intentionally failed to disclose all relevant information relating to the personal circumstances of the clients, including details of their health and medical history,” the Australian Securities and Investments Commission (ASIC) said.
“The incomplete disclosure of the information by Fong Financial Planners meant the duty of disclosure owed by the clients to the insurer had not been met and they risked not being covered by AMP policies.”
In sentencing, Judge Felicity Zempilas noted that there was a degree of persistence in the conduct, which had occurred over a three-month period, and that the offending involved repeated breaches of trust in relation to separate clients who had relied on Fong Financial Planners.
Judge Zempilas stated that “members of the public necessarily place their faith and trust in financial advisors and services and any breach of trust in those circumstances is therefore serious”.
She also considered the significant and unjustifiable risks to the clients had they been required to make a claim under their insurance policies, and the particular relevance of general deterrence for offences of this nature.
Mitigating factors, including Fong Financial Planners’ early guilty pleas, other financial consequences to the company as a result of the conduct, and the low risk of reoffending given ASIC banning orders in place against its sole director, were also taken into account by Judge Zempilas when handing down the sentence.
Fong Financial Planners had previously pleaded guilty to the three charges in March.
The firm and its director, former adviser David Fong, were initially charged with 11 offences, but charges against Mr Fong and eight of the charges against the firm were discontinued following Fong Financial Planners’ pleas of guilty to the three charges above.
In June 2017, ASIC announced Mr Fong had been permanently banned from providing financial services and engaging in credit activities.
Mr Fong appealed ASIC’s decision to the Administrative Appeals Tribunal and the appeal process was stayed pending the outcome of the criminal proceedings, before being withdrawn on 4 September 2023.
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