Bans investment representative
ASIC has banned John Charles Whitehead, of Applecross (WA) from acting as a representative of a dealer or an investment adviser for a period of two years.
ASIC alleged Mr Whitehead had engaged in inappropriate conduct by failing to have a reasonable basis for making recommendations to a number of clients, and engaging in conduct that was misleading or deceptive, or was likely to mislead or deceive, in breach of the Corporations Law.
Mr Whitehead advised clients to invest in redeemable preference shares of several Industrial Edge companies.
At the time he made these recommendations, Mr Whitehead was a director of each of these companies, and a shareholder of two of them.
Mr Whitehead was an authorised representative and director of Winthrop Securities Pty Ltd from November 1 1989 until September 7 2001.
ASIC said Mr Whitehead was found to have caused or permitted extensive breaches of Winthrop’s licence conditions over a period of about five years, by providing advice on securities for which Winthrop did not hold an appropriate licence.
Mr Whitehead can apply to the Administrative Appeals Tribunal for a review of ASIC’s banning order.
Reports on surveillance and compliance program
ASIC has released some facts and figures on its ongoing surveillance and compliance program under the new product disclosure regime, which came into effect with the introduction of the Financial Services Reform Act almost a year ago.
ASIC has conducted preliminary reviews of 87 Product Disclosure Statements and full reviews of 47.
ASIC has reported identifying a number of deficiencies in the information provided to consumers, including: use of undefined or unexplained terms; use of terms in an unfamiliar way; the product issuer’s ability to participate to a greater or lesser extent in the profits (at its discretion); and the ability of the issuer to vary fees at its discretion.
Sees director plead guilty
Ross Maitland Love has pleaded guilty in the Perth Court of Petty Sessions to two charges that followed an ASIC investigation.
Mr Love allegedly acted as a company director while disqualified from doing so.
He acted as a director of Fifeshire Fishing Pty Ltd and of Osborne Cold Stores (WA) Pty Ltd, after being disqualified from acting as a company director for five years from September 1998, for failing to keep proper records in relation to another company.
An administrator was appointed to Osborne Cold Stores (WA) in June 2001.
Releases scheme advice report
ASIC has released a report into the quality of advice and disclosure provided for primary production managed investment schemes.
This report - Compliance with advice and disclosure obligations: ASIC report on primary production schemes -examines the correlation between the receipt of high commissions by financial advisers and the provision of inappropriate or misleading advice to encourage investors to invest in such schemes.
The report is available from the Financial Services Reform page on www.asic.gov.au.
Translates superannuation guide
Chinese and Vietnamese translations of ASIC’s Your Guide to Super: Understanding and making superannuation choices are now available.
Copies of the free Your Guide to Super, are available from 1300 300 630 and www.fido.asic.gov.au.
Backs $1 million internet project
A joint research project between ASIC, the Capital Markets Cooperative Research Centre, the University of Sydney, and Macquarie University, will aid the development of an automatic internet-document-classification system called ‘Scamseek’.
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