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How ASIC acts on some unlicensed activity, not all

Mike Taylor30 April 2024
Elephant in the room

A financial services licensee has revealed how he contacted the Australian Securities and Investments Commission (ASIC) multiple times to report a person making unapproved use of Australian Financial Services Licenses (AFSLs) but the regulator chose not to act.

The licensee who declined to be named has provided Financial Newswire with copies of his correspondence with ASIC over three years together with his correspondence with the licensees whose AFSL numbers were used without authorisation.

The licensee was responding to Financial Newswire’s recent report that unlicensed advice pursued by ASIC had cost financial advisers and licensees nearly $4.5 million in the 2022/23 financial year and that the advice sector would be billed again for its action against Melissa Caddick in the current financial year.

He said he was angered be the fact that he held to AFSLs and paid sizeable levies to ASIC but the regulator had declined to act on the issues of unlicensed advice he had raised.

“I came across an unlicensed criminal using the AFSL of two real AFSL holders (identical to Melissa Caddick) and reported this criminal to the ASIC including the correspondence I had with the two AFSL holders – so did all the work for ASIC,” he said.

However, he said that after many email exchanges ASIC had declined to prosecute stating, “ASIC is not required to investigate every reported instance of misconduct”.

The ASIC correspondence sighted by Financial Newswire noted that the information provided by the licensee had been filed and might be used at some point in the future.

“We have reviewed your report of misconduct, including information you provided against our regulatory requirements and made inquiries of our confidential databases,” ASIC’s response said.

“Based on the information available, ASIC has decided not to take any action at this time. We have considered your correspondence and reviewed our previous decision and will not be investigating the alleged misconduct. ASIC is not required to investigate every reported instance of misconduct.”

“The information that you have provided has been recorded on ASIC’s confidential internal database. Should further information be identified that suggests regulatory action is required this information will be available for consideration.”

At the time, the licensee responded to ASIC describing its position as “staggering” and a “complete joke” and went on to say “given what I am forced to spend to fund the ASIC and be compliant under my own AFSL. No wonder Melissa Caddick got away with her fraud for so long”.

“I will be submitting this letter and all my correspondence to the Senate Inquiry,” he told ASIC in reference to the Senate Economics Committee review of ASIC .

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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29 days ago

Even though ASIC chose not to act, you can bet they added these instances to their contrived tally of “widespread financial adviser misconduct”, in spite of the misconduct NOT being by a financial adviser.

ASIC is far more interested in persecuting professional licensed advisers than they are in protecting consumers. ASIC is the reason professional advice is too complex and expensive for most consumers to access. ASIC is the reason so many consumers are being duped by scams and dodgy products.

Arrogant, Secretive, Incompetent & Corrupt
29 days ago

ASIC were warned for years and years in advance of Storm Financial disaster and did NOTHING !
ASIC were warned for years and years in advance of dodgy Dixon’s MIS and did NOTHING !
Seems ASIC would have filed these many serious complaints in the Can’t Be Bothered to Investigate until the crap hits the fan file.
ASIC = Arrogant, Secretive, Incompetent & Corrupt.

29 days ago

Dispicable behaviour from ASIC. Not surprised though. Harassing properly licenced financial planners, and making it impossible for them to operate via ridiculous red tape and compliance requirements is their preferred activity

29 days ago

I expect there are going to be a plethora of comments to follow.

I personally know of 3 people that were reported to ASIC 5years ago and should have been banned for life. 2 continue to be authorised, provide advice and have FP practices where they mentor newcomers. If one thing can be said about the industry, it is that you are only as good as the people around you.

Cleaning up the industry didn’t require FASEA, CSLR and further education (that’s what ongoing CPD is for) it required the regulator to hold the ‘bad apples’ accountable.

29 days ago

Yet they’ll happily ban someone who is licensed over the most insignificant, trivial things where no complaints have been registered, and in fact even where the very clients ASIC “…seek to protect…” support the adviser and lobby against banning as they’re 100% happy with the services & advice they’ve received. Seen it too many times over the years.

John Wick
28 days ago
Reply to  Don

1 of them was a financial planner they permanently banned for alleged insurance churning. Factual information & 3 independent experts states otherwise. Evidence provided was severely manipulated and it shows no thorough investigation was done.

28 days ago
Reply to  John Wick


One foot out the door.
28 days ago

I think the adviser and Financial Newswire should take this to the opposition as a matter of urgency.