subscribe to our newsletter
Federal Court makes interim orders against financial services firm

Federal Court makes interim orders against financial services firm

Scales of Justice
Miranda Brownlee
12 January 2018

The Federal Court of Australia has made interim orders restraining a financial services firm that previously offered superannuation and loans services, from providing advice or entering into credit contracts.

In a public communication, ASIC stated that on 15 December 2017, it commenced proceedings in the Federal Court against Financial Circle Pty Ltd, alleging breaches of the Corporations Act 2001, the National Consumer Credit Protection Act 2009 and the Australian Securities and Investments Commission Act 2001, including breaches of the best interests duty and unlicensed conduct.

ASIC stated that Financial Circle offered loans to consumers which it alleges could only be obtained if the consumer agrees to obtain and implement financial advice.

“The advice recommends purchasing personal insurance products and switching superannuation providers,” it said.

“When consumers implement the advice, significant advice fees are paid to Financial Circle from the consumer’s superannuation and in commissions from the insurers. ASIC alleges that Financial Circle’s conduct is misleading, deceptive and unconscionable.”

The Federal Court of Australia has made interim orders restraining Financial Circle from engaging in a number of activities including carrying on a financial services business, providing financial advice or entering into credit contracts.

The orders made by the Court on 10 January 2018 prohibit Financial Circle, until the final hearing of the matter, from engaging in activities including carrying on a financial services business, providing financial product advice or dealing in financial products, entering into credit contracts as a credit provider and promoting, advertising or offering loans or cash payments to prospective retail clients.

According to the corporate regulator, the Court made interim injunctive orders on the basis that there was an "appreciable risk" of future contraventions by Financial Circle of each of the provisions relied upon by ASIC.

The order is in place until the hearing and determination of the matter.

Federal Court makes interim orders against financial services firm
smsfadviser logo
  • 23
    Days
  • 07
    Hours
  • 54
    Minutes
  • 01
    Seconds

SMSF Summit is nearly here!
Have you got your ticket?

join the discussion

What do you plan to do in response to the new adviser education standards?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

In this month's issue:

  • Time wrap
  • The tech bull run
  • From hobby to passion
  • Golden Years
  • An untimely reminder
  • Why change is so difficult
  • Key Strategies for equalising super