Friday 18 May 2007 LAWFUEL – The Law News Wire – The Australian Securities and Investments Commission (ASIC) has banned Mr Neil Louis Hartley, of Mackay, Queensland, from providing financial services for five years. Mr Hartley was an authorised representative for Mawson Securities (Mawsons), an Australian Financial Services Licensee. Mr Hartley resigned from Mawsons on 18 October 2005. ASIC banned Mr Hartley after an ASIC delegate found that he had failed to comply with financial services laws and there was reason to believe that Mr Hartley would not comply with these laws in the future.
ASIC found that: • During 2004 and 2005, Mr Hartley advised 13 clients who worked in the central Queensland mining industry to invest in tax effective managed investment schemes without giving adequate consideration to their personal circumstances and features of the tax schemes to ensure that the advice was suitable for those clients; and • In the course of making those recommendations, Mr Hartley made misleading statements in the statements of advice (SOA) he gave to each of the 13 clients regarding what the advantages of implementing his recommendations.
Notably, Mr Hartley told clients that the investment in a tax effective product would provide his clients with diversification, flexibility, independence in selecting investment managers and access to wholesale investment pools. These statements were false and the delegate found that Mr Hartley used these statements to induce clients to make investments in accordance with his recommendations. In other cases, Mr Hartley failed to comply with the legal requirements applying to SOAs and the disclosure of commission payments that Mr Hartley was entitled to receive as a result of clients acting on his recommendations.
ASIC also found that following his resignation as an authorised representative of Mawsons, Mr Hartley had continued to hold out that he was authorised to provide financial services, either in his own right or on behalf of a licensee. ‘Financial advisers must know their client and their products when giving personal advice. Advisers must also disclose what and how they are being paid. Dealing with a licensed adviser provides important safeguards for customers and an adviser cannot falsely hold out that they have a licence or act for a licensee if they do not. This action reinforces these important principles’, said ASIC’s Executive Director of Compliance, Ms Jennifer O’Donnell.