ASIC permanently bans adviser, cancels AFSL

The Australian Securities and Investments Commission (ASIC) has permanently banned a Sydney financial adviser and cancelled the license of his firm, Professional Wealth Management Services.

ASIC announced today that it had permanently banned Donald James Cuthbertson 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.

The regulator said it had also cancelled the Australian financial services (AFS) licence of Cuthbertson’s company, Professional Wealth Management Services Pty Ltd (PWMS), with a condition that the external dispute resolution and arrangements for compensating clients remain in place for 12 months.

ASIC said Cuthbertson is a director of three companies; PWMS, Professional Wealth Management Pty Ltd (PWM) and Professional Wealth Investments Pty Ltd.

ASIC’s concerns arose from Mr Cuthbertson’s conduct regarding:

• offers of redeemable preference shares in PWMS;
• offers of unlisted shares in PWM;
• the promotion of a trading course involving contracts-for-difference; and
• unlicensed dealing in derivatives.

ASIC found Cuthbertson is not a fit and proper person to provide financial services and that he:

• misappropriated investor funds;
• made false or misleading representations in connection with the redeemable preference shares he offered in PWMS and unlisted shares in PWM;
• made false or misleading representations regarding the level of risk involved in trading contracts-for-difference; and
• was involved in dealing with derivatives without appropriate authorisation.

PWMS’s AFS licence was cancelled based on the findings made regarding Mr Cuthbertson, that PWMS:

• failed to do all things necessary to ensure that its financial services were provided efficiently, honestly and fairly;
• failed to ensure it had adequate arrangements in place for the management of conflicts of interest; and
• failed to comply with the licence condition requiring PWMS to maintain total assets exceeding total liabilities as shown in the licensee’s most recent balance sheet lodged with ASIC.

Cuthbertson and PWMS have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.