Following a settlement approval hearing held in the Federal Court of Australia on 3 April, E&P Financial Group announced on the ASX that Justice Thawley adjourned the settlement approval hearing to 17 April 2024 to “allow the applicant to provide further information to the court”.
The group did not provide further detail on exactly what kind of information the court is seeking.
The hearing relates to the class action that Shine Lawyers filed in December 2021 against Dixon Advisory & Superannuation Services (DASS), E&P Financial Group, former Dixon chief executive Alan Dixon and former director Christopher Brown.
In November 2023, the class action, which alleged DASS financial advisers gave unsuitable advice and failed to address conflicts of interest, was settled for $16 million.
Shine Lawyers, representing the class action, said a conditional settlement had been reached between E&P Financial Group and the estimated 4,000 customers allegedly affected by the conduct.
The settlement was reached without admission of liability and is subject to court approval.
The class action alleged E&P advisers, working under DASS – which went into liquidation in January 2022 – gave unsuitable advice that did not reflect their clients’ needs or their financial circumstances.
It was also alleged the advice was not in the clients’ best interests and, when there was a conflict, it was not adequately addressed.
The affected clients will retain the ability to make a claim with the Australian Financial Complaints Authority or Compensation Scheme of Last Resort (CSLR).
“We are pleased to have been able to reach a conclusion in this class action for group members subject to the court’s approval, and that group members will retain their rights to bring a claim against DASS, pursuant to the financial compensation scheme of last resort,” Shine Lawyers’ head of class actions, Vicky Antzoulatos, said at the time.
Separate action filed by Piper Alderman, which was stayed pending the resolution of Shine Lawyer’s proceedings, has been dismissed.
In September 2022, the Federal Court imposed a $7.2 million penalty on Dixon Advisory over its investment advice.
The court found that on 53 occasions between October 2015 and May 2019, Dixon Advisory was the responsible licensee of six representatives who did not act in the best interests of eight clients when they advised these clients to acquire, roll over or retain interests in the US Masters Residential Property Fund (URF) and URF-related products.
Representatives of Dixon Advisory were also found to have failed to conduct a “reasonable investigation” of the clients’ circumstances before providing advice.
Ok.. now ASIC are going to charge advisers to recoup, I work in a risk only advisory firm, we do not advise or handle any client funds, why should we have to pay when we do not handle any client funds.
Politicians have not funded ASIC’s supervision since FOFA ACT 2004 (quote Hon Bert van Manen) and major political parties are under the misapprehension to compensate for ASIC’s lack of direct supervision annual investigations of those handling clients’ funds that caused negligence, by imposing levies and CSLR compensation on unrelated financial advisers who never received any management fees for handling clients’ funds, which is making profit for Treasury where wrong doers penalties paid, were not credited back to reduce financial advisers levies. Treasury Department is profiting from financial adviser small businesses by 1.6 times ASIC’s enforcement costs (quote Hon Stuart Robert) from (double incomes = penalties + levies) leveraging off the misery of the clients who lost money to unsupervised ASIC’s licensed money handlers. In comparison to the SEC in the US in 2023, SEC completed 780 prosecutions and imposed US$5 billion in compensation and penalties, but nothing was levied on financial advisers, who had done nothing wrong. Australian politics is unconscionable and harsh failure in accountable Domestic Governance against financial advisers who never handle clients’ funds. Did ASIC ask SEC to investigate Dixon’s US Masters Residential Property Fund (URF) and URF-related products where Dixon Financial and its related entities were handling clients’ funds?
Ross a well written, thoughtful and exactly correct! Comment. Unfortunately, I don’t think anyone cares. And we’ll be on the receiving end of this type of treatment until there’s none of us left.
I resent having to pay a portion of these costs for something that has nothing to do with me. I do not think ASIC will make crooks act ethically.