CSLR pays out on firm AFCA expelled in 2021

A financial services firm which the Australian Financial Complaints Authority (AFCA) expelled in early 2021 has had its Australian Financial Services License (AFSL) cancelled because its clients received compensation via the Compensation Scheme of Last Resort (CSLR).

The firm, Viridian Equity Group Pty Ltd, was listed as being non-compliant as far back as March, 2021, because it had failed to pay its AFCA levy.

ASIC said that the firm had failed to pay three AFCA determinations.

The CSLR was not formally established until June 2023 and commenced operations in April, 2024.

ASIC said that on 31 October 2024, AFCFA made three determinations against Viridian Equity, which Viridian Equity failed to pay. Subsequently, on 11 March 2025, the CSLR paid three payments totalling $450,000.00 for the AFCA determinations and notified ASIC. As a result, on 17 April 2025, ASIC cancelled Viridian Equity’s AFS licence.

Where the CSLR pays compensation to an eligible consumer in relation to an AFCA determination and notifies ASIC of the details of the firm that failed to pay the compensation, ASIC must cancel the AFS licence or credit licence of the firm.

The cancellation is not subject to discretion or merits review.

On 4 March 2021 AFCA published a list of 34 financial firms which had failed to pay their AFCA membership levy and said the firms and authorised credit representatives “have been expelled from membership of AFCA”.

That list included Viridian Equity Group Limited.

Documents provided to a Parliament Committee reveal that Viridian Equity Group was involved in the promotion of a Managed Investment Scheme (MIS) with AFCA receiving a formal complaint from investors in July, 2018.

The documents revealed that the investments dated from December, 2011 and that, initially at least, AFCA had told the affected investors that they the authority would not be taking action because the firm did not hold current AFCA membership.