Dixon Advisory collapse coincided with ASIC’s dark days
The reality for financial advisers questioning the Australian Securities and Investment Commission’s (ASIC’s) handling of the collapse of Dixon Advisory is that it coincided with one of the most controversial periods for the regulator including the standing aside of a chair and the resignation of a deputy chair.
While Senate Estimates awaits an answer from ASIC on which of its former commissioners or senior executives was responsible for a key decision on the prosecution of Dixon Advisory, history shows the company’s collapse coincided with previously unprecedented conduct within the regulator.
That period saw the then ASIC chair, James Shipton stand aside during an investigation into the payment of his relocation expenses from the US while his deputy chair, Daniel Crennan, resigned over the payment of his removal expenses from Melbourne to Sydney.
While a Treasury investigation ultimately cleared Shipton of wrong-doing, it is also now history that a bitter falling-out occurred between he and another ASIC deputy chair, Karen Chester.
So, when NSW Liberal Senator, Andrew Bragg recently asked the current ASIC executive who was responsible for making the decision around prosecuting the Dixon Advisory licensee rather than financial advisers, it seems little wonder that the current incumbents struggled to provide an answer.
2019/20 is not a period sensible senior ASIC operatives want to revisit.
The exchange during Senate Estimates went like this:
Senator BRAGG: How does it work at ASIC? Who makes a decision-in this case-to not go after the financial planners that did the dodgy, and to pursue just the AFSL holder, who are likely to go into administration?
Ms Court: If it were today, the enforcement committee of the commission would be making the decision based on recommendations from our investigation teams and based on legal advice that we receive prior to commencing proceedings. We seek legal advice to assist us to scope matters to work out what the appropriate best contraventions are and to assist us in who we take matters up with.
Senator BRAGG: Which commissioner signed off on this?
Ms Court: As I said, that is how the system works today. Back in 2020 I wasn’t at ASIC. I assume that the then enforcement committee signed off on it, but I could take that on notice for you.
Senator BRAGG: Does anyone else at the table know? Does someone else know which commissioner signed off on the Dixon matter?
Ms Court: It was some four years ago, I’m afraid. We can find out for you.
Senator BRAGG: You must know.
Sorry, but I don’t accept the Dixons issue was an ASIC one off that occured during a narrow window of staff wrongdoing.
Dixons was part of a long continuum of incompetence and prejudice by ASIC. The rot started with Greg Metcalf, and persists to this day. Dixons is just one example of many, where ASIC has ultimately made things worse rather than better for Australian consumers. ASIC has deep rooted cultural problems that cannot be fixed by the removal of one or two staff who diddled their expenses.
ASIC is incapable of fair and competent financial advice regulation. That function must be taken away from them.
100% ASICs incompetence and corruption are decades deep and still just as bad.
ASIC were warned for over 10 years on many occasions, the Adviser & client complaint list about Dodgy Dixon’s MIS fiasco to ASIC & AFCA is many in number and over an extended time period.
Let’s get All the complaints tabled.
Let’s get All ASICs non responses tabled.
Let’s get All the staff involved in anyway tabled.
From complaint 1 right through until CSLR design & manipulation, to zero charges against Dixon’s management.
Let’s expose this massive ASIC disaster.
Arrogant
Secretive
Incompetent &
Corrupt
Mike Taylor, it is nice of you to step in and support ASIC and rationalise what happened, however I would suggest that the separation between the action that ASIC took against Dixon Advisory and the appointment of the current commissioners is not as huge as you are suggesting. In fact, both the Chair and relevant Deputy Chair were onboard when the decision was announced that ASIC had settled with Dixon Advisory and 16 months before the settlement was finalised and approved by the Courts. Keep in mind the announcement in July 2021 was the point at which the agreed penalty was confirmed and along with dropping the charges for breach of the client priority rule. Seemingly this is also when they agreed to take no further action against Dixon Advisory and their management. You can’t suggest that neither of them would have had any involvement or awareness of such an important decision.
1 June 2021 – Commencement of Chair and Deputy Chair:
https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/appointment-new-chairperson-and-deputy-chairperson
9 July 2021 – ASIC announces conditional agreement to resolve Civil Penalty Proceedings
https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-167mr-asic-and-dixon-advisory-enter-conditional-agreement-to-resolve-asic-civil-penalty-action/
19 September 2022 – ASIC announces $7.2m penalty (which was never paid) awarded against Dixon Advisory
https://asic.gov.au/about-asic/news-centre/find-a-media-release/2022-releases/22-256mr-dixon-advisory-penalised-7-2-million-for-breaches-of-best-interest-obligations/
The facts suggest a different sequencing of events.
Some 4 years ago? Thats not far back at all. ASIC really is a basket case.
How about ASIC does a look back, just like they forced advisers to do. Advisers had to justify everything they did in the last 10 years, I think this is fair for them too. The evidence standards should be at the same unrealistic level they demanded of the advice profession. If they are unable or refuse to prove evidence then all ASIC staff should pay back their salaries and bonuses, with the proceeds being paid to clients that lost money due to the many failings of ASIC starting with Dixons, which will remove the need for CSLR claims. This is the standard they set for others, they should live it too.
And let’s apply the FARSEA Standards & Code of Ethics to ASIC too.
Standard 1 – Must act in accordance all applicable laws and not try to circumvent them
Standard 2 – Must act with integrity and best interest of your clients (i.e. Advisers)
Standard 3 – Must NOT Advice or Act in manner where you have a conflict of interest
Standard 9 – All Advice you give must be offered in good faith and with competence and be neither misleading nor deceptive
Standard 10 – You must develop, maintain and apply a high level of revelant knowledge and skills.
How about mandatory degrees for ALL ASIC higher level staff & Minimum 40 hrs CPD.
Standard 11 – You must cooperate with monitoring bodies in any investigation of a breach OR potential breach of this code
Standard 12 – Individually and in cooperation with peers, you must uphold and promote the ethical standards of the profession and hold each other accountable for the protection of the public interest.
it would seem ASIC would fail FARSEA Standards and Codes on multiple levels.
Was exactly what I was thinking “researcher”. ASIC completed a look back on advisers, time for a look back on them & prosecution for their ineptitude
This answer from ASIC does not stack up. The current Chair and Deputy Chair for enforcement commenced on 1 June 2021. The agreement to settle with Dixon Advisory was 9 July 2021. They were both there when the deal was done and the decision was made to drop the other potential actions including those related to the client priority rule.
Split them up!!! corporate cops for the working blokes only !
Interesting that the Managing Director of Evans and Partners and former Dixon Chair, David Evans purchased a $14M Sunshine Beach holiday house in December 2020….. (https://www.urban.com.au/news/former-bomber-chairman-david-evans-buys-14-million-sunshine-beach-home). Behind every collapse, there always seems to be directors that walk away without losing a cent and leave others to clean up (and pay for) the mess. It might be worth a bit of investigating……..?
And his business took a $10 Million fee from the sale of solar assets whilst investors, mostly from the Dixon Advisory debacle (of which Evans is implicated in) take a massive hit. This article from the SMH explains that David Evans has no moral or ethical foundation. https://www.smh.com.au/business/markets/no-moral-or-ethical-foundation-solar-fund-wipeout-raises-investor-hackles-20220920-p5bjgm.html
https://www.smh.com.au/business/markets/no-moral-or-ethical-foundation-solar-fund-wipeout-raises-investor-hackles-20220920-p5bjgm.html