ASIC Enforcement Wrap: August 2025 | NAB hit for hardship failings

Dan Mackay, Director, and Hayley Civitarese and Allegra Hird, Law Clerks

Key August Takeaways:

·        The Federal Court has ordered a hefty $10 million to iSignthis for engaging in misleading or deceptive conduct and breaching its continuous disclosure obligations

·        ASIC successful in its first civil penalty case for contraventions of whistleblower provisions, with TerraCom ordered to pay a $7.5 million penalty for whistleblower victimisation

·        ASIC achieved one of its enforcement priorities for 2025 – prosecuting insider trading – in its successful detection and subsequent charging of Rodney Forrest in the Federal Court’s expanded criminal jurisdiction

Spotlight – National Australia Bank and AFSH Nominees Pty Ltd fined $15.5 million for failing customers facing financial hardship

One of Australia’s largest banks, National Australia Bank (NAB), and its subsidiary AFSH Nominees Pty Ltd (AFSH), have been fined a total of $15.5 million by the Federal Court of Australia for failing customers experiencing financial hardship. On 13 August 2025, Justice Neskovcin ruled that NAB and AFSH contravened section 72(4) of the National Credit Code (Code) (underthe National Consumer Credit Protection Act 2009 (Cth)) by failing to provide customers that had submitted hardship notices with a written responsewithin the 21-day time limit set by section 72(5) of the Code.

Between 16 November 2018 and 14 October 2023, NAB failed to respond to 282 hardship notices within the required timeframe, thus contravening sections 72(4) and (5) of the Code. On 13 March 2019, section 175A of the National Consumer Credit Protection Act 2009 (Cth) came into effect. From that date, if a lender failed to respond to a hardship notice within the required timeframe, every day beyond that time frame without a response constituted a new contravention until the lender finally replied. Thus, the 262 hardship notices that NAB received on or after 13 March 2019 and up until 10 February 2025 constituted a further 353,910 contraventions.

AFSH also contravened section 72(4) of the Code by failing to give a written response to 63 hardship notices submitted by AFSH customers within the 21-day timeframe between 9 January 2019 and 20 September 2023. The 58 hardship notices received on or after 13 March 2019 constituted a further 61,297 contraventions up until 10 February 2025.

Handling of NAB and AFSH hardship notices was done internally via the NAB Assist team, whose systemic erroneous use of the “reject hardship request” function resulted in the relevant NAB or AFSH customer’s account being removed from the Team’s workflow and no communication being sent to the client regarding their request. Whilst none of these user errors were classed as deliberate in Justice Neskovcin’s decision, she noted that the large number of contraventions “highlight the seriousness of [NAB & AFSH’s] conduct”.

The pecuniary penalty for NAB was $13 million, and for AFSH $2.5 million. The total financial penalty for NAB and its subsidiary ($15.5 million) represents 0.22% of NAB’s net profit for the 2024 financial year. 60 customers affected by NAB and AFSH’s contraventions will receive a total of $539 each for financial and non-financial impact. NAB is also required to pay all costs incurred by ASIC in the proceedings.

As well as a pecuniary penalty, both NAB and AFSH are required to post to their websites an adverse publicity notice, and disclose it directly to affected customers via mail or email. Both the pecuniary and publicity penalties are intended to deter NAB, and other financial services providers, frommaking similar contraventions that, as ASIC’s Deputy Chair Sarah Court says, “make an already challenging time in people’s lives far worse.”

August in Summary – Enforcement Actions and Outcomes

Civil Action

Civil Proceedings

ASIC commenced two civil proceedings:

·        ASIC commenced Federal Court proceedings against Mercer Super, one of Australia’s largest superannuation funds, for failing to inform ASIC about investigations into serious member service issues. ASIC alleges that between October 2021 and September 2024, Mercer Super had inadequate systems to comply with the reportable situations regime. Mercer Super allegedly failed to report seven investigations, with an additional investigation being reported almost a year late. These investigations included insurance premiums being incorrectly refunded after members had died, member accounts not being created with default insurance, and updates to member information not being processed by the trustees. In addition, Mercer Super allegedly provided false or misleading information to ASIC by understating the number of impacted members.

·        ASIC has commenced civil penalty proceedings against Equity Trustees Superannuation Limited (Equity Trustees) alleging the superannuation trustee failed to exercise due diligence by allowing thousands of its members to invest in the Shield Master Fund (Shield). EquityTrustees supervised the investment of roughly $160 million of retirementsavings into Shield over 2023 and 2024. Shield collapsed following an ASIC investigation and it is unclear what return members will receive.

Civil Penalties

The Federal Court ordered $24.9 million in civil penalties against four companies:

·        iSignthis Ltd (iSignthis), now known as Southern Cross Payments Ltd, was ordered to pay a $10 million penalty by the Federal Court for engaging in misleading or deceptive conduct and breaching disclosure laws. iSignthis’ former managing director and chief executive officer, Nickolas John Karantzis, was disqualified from managing corporations for six years and penalised $1 million for breaching his directors’ duties and providing false or misleading information to the ASX. In handing down his decision, Justice McEvoy noted that the community is entitled to expect that investors will not be misled and that questions asked by the market operator will be answered accurately.

·        Rent4Keeps and its largest franchisee, Darranda Pty Ltd, had civil penalties of $4 million and $3.4 million respectively, imposed by the Federal Court for overcharging vulnerable consumers and failing to comply with obligations as credit licensees. In September 2024, Justice Hespe found that Darranda entered into hundreds of credit contracts where it contravened the annual ratecap. Rent4Keeps was found to have been knowingly involved in these rate cap breaches as well as breaches of its general obligations. In handing down the penalty, Her Honour noted that businesses operating with a financially vulnerable client base must act efficiently, honestly, and fairly.

·        TerraCom Limited has been ordered to pay a civil penalty of $7.5 million by the Federal Court for whistleblower victimisation. TerraCom made two ASX announcements on 14 February 2020 and 3 April 2020 and published an open letter in the Australian Financial Review and The Australian on 12 March 2020 which stated that allegations made by a whistleblower were false, and that TerraCom had the conduct of its employees independently investigated. TerraCom admitted that these announcements caused detriment to the whistleblower and damaged his reputation. TerraCom was also ordered to pay ASIC’s legal costs of $1 million.

Other Civil Actions

The Federal Court made other orders in two cases:

·        The Federal Court has made urgent interim orders to freeze the bank accounts of Gregory Raymond Cotton and First Mutual Private Equity Pty Ltd (First Mutual), of which Mr Cotton is the sole director. The interim orders prevent Mr Cotton and First Mutual from incurring new liabilities or transferring monies. ASIC sought the urgent orders to safeguard investor funds while it investigates. ASIC’s investigation relates to $53 million of investor funds provided to Mr Cotton and First Mutual which ASIC suspects have not been used for the purpose of investment.

·        The Federal Court has granted ASIC leave to expand its proceeding against Ferras Merhi, a former financial adviser. ASIC alleges that Mr Merhi engaged in unconscionable conduct, failed to act in the best interests of clients, and provided defective statements of advice. It is further alleged that Mr Merhi used marketing companies to push potential clients to his financial advice businesses, Venture Egg and Financial Services Group Australia (in liquidation).  This is a significant expansion of ASIC’s existing proceedings against Mr Merhi, now involving civil penalty action.

Criminal Action

Charges

Six individuals were charged with criminal offences:

·        Dimitrios (James) Podaridis, Peter Delis, Bassilios (Bill) Floropoulos, and Harry Tsalikidis, were charged with dealing in proceeds of indictable crime contrary to the Criminal Code (Cth) in relation to alleged investment scams. ASIC alleges that between January and July 2021, the four individuals were involved in facilitating a sophisticated financial investment scam offering fraudulent bonds and other financial products. ASIC alleges that fictitious websites and advertisements were used to attract investors, that investors were contacted via telephone or email, and provided with fake branded prospectuses and documentation which mimicked actua lprospectuses from major financial services providers.

·        Rodney Forrest, a former investment manager, has been charged in Sydney’s Local Court with two counts of insider trading between August and September 2024. Mr Forrest allegedly acquired roughly $2.6 million of Platinum shares whilst in possession of inside information and procured others to do the same. This follows the formation of ASIC’s new criminal investigation taskforce last year. It is also one of the first criminal matters referred to the Federal Court following its expanded jurisdiction.

·        Marion Joan Pearson, a former financial advisor, appeared in the Perth Magistrates Court charged with 136 charges of stealing under section 378 of the Criminal Code (WA) in relation to the alleged misappropriation of $4,100,000 of client funds. Ms Pearson was extradited from New Zealand after several years of appeals against her extradition, with New Zealand’s Supreme Court ruling against her final appeal in May 2025.

GuiltyPleas

One individual pleaded guilty:

·        Ashley Vincent Arandez pleaded guilty in the County Courtof Victoria to dishonest conduct in relation to a financial product or financial service, to carrying on a financial services business without a license, and to recklessly dealing with proceeds of crime. It is alleged Mr Arandez carried on afinancial services business where he encouraged clients to invest in various businesses that he controlled, receiving a total of $1.97 million, and providing financial advice without holding an Australian Financial Services Licence or being authorised under one.

Sentencing

Two individuals were sentenced:

·        Michael David Steele, a former property developer, was sentenced to eight years’ imprisonment after pleading guilty on 10 April 2025 to three counts of fraud contrary to s 408C(1)(a)(i), (2)(d) and one count of fraud contrary to s 408C(1)(a)(i), (2A), of the of Criminal Code (Qld). Mr Steele will be eligible for parole after serving 20 months’ imprisonment. In 2016 and 2017, Mr Steele persuaded 14 investors to withdraw $1.3 million of funds from their superannuation for the Biggera Waters development. Mr Steele instead used the funds for personal gain, including purchasing a house in his wife’s name and paying his son’s university fees. None of the $1.3 million was repaid to investors.

·        Darryl Brian Mapleson, a geological services provider, was sentenced to 12 months imprisonment to be released upon entering a recognisance of $5,000 to be of good behaviour for two years. He was also fined $60,000. Mr Mapleson pleaded guilty to one count of insider trading contrary to s1043A(1)of the Corporations Act 2001 in relation to trading in Beacon Minerals Limited.

Administrative Action

Bannings

Three individuals were banned by ASIC:

·        Andrew Rankin, a Gold Coast-based financial advisor, has been banned for four years effective 14 August 2025 from providing financial services, carrying on a financial services business, or controlling an entity that carries on a financial services business. ASIC found that Mr Rankin failed to act in the best interests of his clients by failing to identify his clients’ objectives, identify the subject matter of advice, and conduct reasonable investigations into relevant financial products. Further, Mr Rankin gave inappropriate advice while authorised by Next Generation Advice Pty Ltd (In Liquidation) because he recommended clients invest mostly in the Global Capital Property Fund Limited (in liquidation) and the Pivotal Diversified Fund despite them being speculative investments.

·        Jason Richard Poser, a South Australian-based SMSF accountant, has been permanently banned effective 1 August 2025 from providing financial services, carrying on a financialservices business, or controlling an entity that carries on a financial services business. Mr Poser was convicted of aggravated theft for stealing funds from his client’s SMSFs. Under the Corporations Act, ASIC may permanently ban a person if they are convicted of fraud, which includes dishonesty offences.

·        Robert John Tohill, former responsible manager and compliance manager of MWL Financial Services Pty Ltd (MWL), has been banned for four years effective 25 August 2025 from providing financial services, performing a rople as either an officer, responsible manager or compliance manager in carrying on a financial services business, or controlling an entity that carries on a financial services business. ASIC found that Mr Tohill was involved in contraventions of financial services law by another person, was on the investment committee that approved the Shield Master Fund and failed in his functions as a compliance manager and responsible manager, among other conduct.

Licence Cancellation

Four companies had their Australian financial services licence (AFSL) or Australian credit licence (ACL) cancelled:

·        ASIC cancelled the ACL of Chuuse Pty Ltd (ACN 002 170 541) (Chuuse), a Queensland-based credit services provider, effective 11 August 2025. Chuuse had ceased to engagein credit activities.

·        ASIC cancelled the AFSL of BDS Accounting Pty Ltd, effective 28 July 2025. BDS Accounting’s AFSL was cancelled as the financial services provider failed to pay industry funding levies which were outstanding for over 12 months, pursuant to section 915B(3)(e) of the Corporations Act 2001.

·        ASIC cancelled the ACL of Easy Plan Financial Services Pty Ltd (Easy Plan) following a payment by the Compensation Scheme of Last Resort (CSLR). On 18 March 2022, the Australian Financial Complaints Authority made a determination against EasyPlan, which they failed to pay. On 14 August 2025, the CSLR paid $84,600 to a person for the AFCA determination. On 20 August 2025, ASIC cancelled EasyPlan’s ACL.

·        ASIC cancelled the AFSL of MWL Financial Services Pty Ltd (MWL) over its relationship with Shield Master Fund (Shield). From 2021, MWL was found to be operating a referral scheme that recommended Shield to over 750 MWL clients who collectively invested $155 million. ASIC found that, among other serious compliance failures, MWL was incentivised to recommend Shield to its clients, and operated with serious conflicts of interest. Financial advisors were offered bonuses for recommending Shield to their clients, a fact that was not disclosed to investing parties. Furthermore, MWL failed to properly assess Shield as an investment opportunity, instead making misleading representations of the company’s past performance.

Disqualifications

ASIC disqualified one person from managing corporations:

·        Mark Zappria has been disqualified by ASIC from managing corporations for five years until 7 July 2030, following hisinvolvement in five failed companies which operated in the transport or removal industries. The five companies owe a total of $7,049,582 to unsecured creditors,including the ATO and various trade suppliers. ASIC found that Mr Zappia acted improperly and failed to meet his obligations as an officer when he failed to ensure all the companies paid their tax debts, failed to maintain books and records for two companies, and allowed two companies to trade while insolvent, among other findings of failures.

Administrative Review Tribunal (ART)

The ART handed down one decision:

·        ASIC’s decision to ban United Global Capital (UGC) (in liquidation) director Joel James Hewish for 10 years has been upheld by the ART. Mr Hewish has been banned from providing financial services, carrying on a financial services business, or controlling an entity that carries on a financial services business. In June 2024, Mr Hewish sought review of a decision made by an ASIC delegate on 31 May 2025. The ART handed down its decision on 4 August 2025.

Auditor Actions

28 self-managed superannuation fund (SMSF) auditors were disqualified, had additional conditions imposed on their registration, or had their registratios cancelled:

·        28 SMSF auditors had their registration changed following action by ASIC. Between 1 January 2025 and 30 June 2025, ASIC disqualified three SMSF auditors and imposed additional conditions on 12 SMSF auditors. ASIC took these actions due to various concerns including but not limited to breaches of professional obligations and not being a fit and proper person to remain an approved SMSF auditor. ASIC also cancelled the registration of 13 SMSF auditors for failing to comply with their obligation to lodge annual statements.

If any of the above is relevant to you or you want to know more, please feel free to get in touch.

The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.

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