In a public statement, ASIC stated it has commenced civil penalty proceedings in the Federal Court against R M Capital Pty Ltd and its authorised representative, The SMSF Club Pty Ltd, in relation to accepting conflicted remuneration.
ASIC alleges that SMSF Club advised its clients to set up SMSFs then use their SMSF to buy real property marketed by a real estate agent, Positive RealEstate Pty Ltd.
ASIC also asserts that SMSF Club had referral agreements with Positive RealEstate and that RM Capital was aware of this referral agreement.
The corporate regulator contends that from December 2013 to July 2016, each time an SMSF Club client used their SMSF to buy a property marketed by Positive RealEstate, Positive RealEstate paid around $5,000 to SMSF Club. At times, Positive RealEstate paid these amounts directly to SMSF Club, while at others it paid them to RM Capital who passed on the majority to SMSF Club.
ASIC alleges that SMSF Club accepted more than $730,000 in conflicted remuneration from Positive RealEstate.
ASIC’s case is that the payments could reasonably be expected to have influenced financial product advice given by SMSF Club to its clients, and so constituted banned conflicted remuneration under the Corporations Act.
It is also alleges that RM Capital was aware of the payments and did not take reasonable steps to stop the SMSF Club from accepting them. ASIC contends that as the authorising licensee for SMSF Club, RM Capital’s failure to take reasonable steps to ensure SMSF Club’s compliance also breached the law.
ASIC is seeking declarations of contravention, civil penalties and compliance orders against both RM Capital and SMSF Club.
“This will be the first case concerning the alleged breach of conflicted remuneration provisions,” ASIC said.
“ASIC will contend that SMSF Club and RM Capital contravened the Act on as many as 259 occasions each. Each contravention attracts a potential civil penalty of up to $1 million.”
Good to see they are finally doing something, I just hope that they look in further than just conflicted remuneration and review advice documents, client best interest etc.
Its property spuikers and firms passing off pure product sales as ‘advice’ that need to get stamped out completely.
Where is ASIC when it comes to the big banks and investment houses. Usually no where to be seen. ASIC are merely glory hounds. Be careful ASIC to never go after the big fish you might really step on some toes there.
A GOOD start !!!
So, what the article is really saying is that it has taken 3 years for ASIC to move against another property spuiker dressed up as an ‘advice firm’.