Adviser loses appeal to lift ban after ASIC fraud investigation

A financial adviser has lost an appeal to have his permanent ban lifted after the Administrative Appeals Tribunal (AAT) deemed it was an appropriate sentence for “blatant and relatively serious” fraud.

Sean John Sweeney was permanently banned by the Australian Securities and Investments Commission (ASIC) from “providing any financial services, performing any function involved in the carrying on of a financial services business, and controlling an entity that carries on a financial services business” on 4 November 2022.

This is the same date he was convicted of fraud offences in a local NSW court.

ASIC said Sweeney was authorised to provide advice between 17 November 2014 and 30 July 2018, during which he was the sole director of Sweeney Insurance Services authorised between 17 November 2017 and 8 October 2018 and was the sole director Swinsure authorised from 1 July to 30 July 2020.

Tribunal Deputy President, Bernard J McCabe, who presided over the case, handed down his decision in agreeance with the corporate regulator’s on 26 April, saying that while Sweeney “appears to have made progress” in his reparation efforts, “the offences remain an insuperable obstacle”.

“The behaviour that was the subject of the charges was serious if unsophisticated: large amounts were involved. The applicant’s behaviour was driven by addiction, but those addictions might resurface if the applicant were to slacken his commitment to sobriety,” McCabe’s decision said.

“The frauds were not a victimless crime. The applicant was in a position of trust when the frauds occurred and he wants to return to a position of trust, even if he might have a more limited role were I to narrow the scope of the banning orders.

“The offending all happened comparatively recently. In all the circumstances, I am satisfied the nature and timing of the convictions are such that I have reason to believe the applicant is not a fit and proper person to undertake the regulated activity.

“In this case, I am satisfied a permanent ban is appropriate having regard to the fact the fraud was blatant and relatively serious, and because it occurred in the course of undertaking the very work the applicant would like to be able to resume. The conduct in question also occurred comparatively recently.

“Imposing a permanent ban would help communicate a message to other participants in the industry that dishonest conduct of this nature will not be accepted. The ban performs a protective function. The message will also reassure consumers of financial services that fraud and dishonest conduct is policed and punished. That promotes the development of a high-trust commercial environment. A high-trust commercial environment is more efficient because it reduces transaction costs when consumers do not need to guard against this sort of bad behaviour.

“I did consider the possibility of imposing a long term or permanent ban on Mr Sweeney but narrow its scope so that he could work in the industry as a supervised employee in the short or medium term. I have decided that is not the correct course. The message to other industry participants would be diluted if I were to reduce the scope of the ban. A clear message is needed to achieve a deterrent effect. It is also desirable to send a clear, unmistakable message to consumers that fraud is not tolerated anywhere in the industry.”