Former Financial Circle director charged following ASIC investigation
The former director of an advice firm that offered personal loans in exchange for exorbitant advice fees charged to client super fund accounts has been charged with four offences.
Joshua David Fuoco, of Melbourne, Victoria, has been charged with three counts of managing a corporation while disqualified and one charge of failing to deliver company records in his possession for an advice firm called Wealth & Risk Management Pty Ltd, in accordance with directions of the liquidator appointed to wind up that company.
In 2016, ASIC disqualified Mr Fuoco from managing corporations for two years and six months, after two companies, FP Investment Partners Pty Ltd and Equilibrium FS Pty Ltd, were wound up.
ASIC alleges that during his period of disqualification, Mr Fuoco continued to manage a company, Financial Circle Pty Ltd, between 21 August 2017 and 5 September 2018.
The corporate regulator cancelled the financial services and credit licences of Financial Circle in 2018 after the Federal Court found that Financial Circle breached numerous financial services laws and obligations, including engaging in unconscionable conduct and failing to act in its clients’ best interests.
An investigation by ASIC found that Financial Circle had offered personal loans to consumers of up to $5,000 that could only be obtained if the consumer agreed to receive and implement financial advice.
According to ASIC, the advice typically recommended purchasing personal insurance products and switching superannuation providers.
When consumers implemented the advice, significant advice fees were paid to Financial Circle directly from the consumers’ superannuation. Financial Circle also received ongoing commission payments from the insurers, ASIC said previously.
Mr Fuoco’s matter was listed for first mention in the Melbourne Magistrates Court on 5 November 2020. On that date, the matter was adjourned to 28 April 2021.
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
